Burden of proving lawful possession of notified gold upheld despite retraction, tax disclosure, and Gold Control exoneration.

Foreign-origin notified gold recovered from an appellant's possession attracted a burden on him to prove licit possession under the Customs Act, 1962. The retracted statement did not undermine the case because the confiscation was supported by independent corroboration, while the explanations for purchase, source of currency, and family ownership were rejected as inconsistent and unproved. Pre-1947 inscriptions on some coins and later reflection of value in income-tax returns did not establish lawful acquisition. Exoneration under the Gold Control Act was held irrelevant to Customs proceedings because the two enactments operate for different purposes. The confiscation of the gold sovereigns and currency, and the penalty, were therefore upheld.

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Issues: Whether the confiscation of the seized gold sovereigns and Indian currency, and the penalty imposed, were sustainable where the appellant relied on a retracted statement, asserted pre-independence origin and family ownership of the coins, and claimed that disclosure in income-tax returns and exoneration under the Gold Control Act supported lawful possession.

Analysis: The seized gold sovereigns were foreign-origin notified goods and, once recovered from the appellant's possession, the burden lay on him to establish licit possession under the Customs Act, 1962. The initial explanation regarding purchase from the open market was unsupported, the alleged source of the currency was disbelieved on investigation, and the appellant's brother denied knowledge of any such acquisition. The retraction of the statement did not displace the evidentiary value of the material because the case was supported by independent corroboration. The fact that some coins bore pre-1947 inscriptions did not by itself prove lawful possession, particularly when the seizure was from the appellant's person in a bullion market and the explanation given was found inconsistent. Reflection of the value in income-tax returns filed after seizure did not establish lawful acquisition. Exoneration under the Gold Control Act did not control the Customs Act proceedings, as the two enactments served different purposes.

Conclusion: The confiscation of the gold sovereigns and currency, together with the penalty, was upheld as the appellant failed to discharge the burden of proving licit possession.

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