Burden of proof in smuggling cases shifts to the possessor once prima facie evidence of illicit import is shown.

For goods not covered by Section 123 of the Customs Act, 1962, the Department must first prove smuggling by applying the general burden of proof under Sections 101 and 102 of the Indian Evidence Act, 1872. Section 106 may then shift the onus to the possessor when lawful possession or acquisition lies especially within that person's knowledge. On the stated facts, foreign markings, possession of the goods, and absence of supporting purchase or duty-paid documents were treated as sufficient prima facie circumstances to shift the burden. The possessor failed to establish lawful acquisition, so the goods were held smuggled and liable to confiscation, and the confiscation orders were restored.

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Issues: Whether, in respect of goods not covered by Section 123 of the Customs Act, 1962, the burden of proving that the seized goods were smuggled goods lay initially on the Department and, if so, when that burden shifted to the person from whose possession the goods were seized.

Analysis: For goods outside Section 123 of the Customs Act, 1962, the general rule under Sections 101 and 102 of the Indian Evidence Act, 1872 applies and the Department must first adduce evidence showing that the goods are smuggled. Section 106 of the Indian Evidence Act, 1872 may then operate where facts relating to lawful possession or acquisition are especially within the knowledge of the person concerned. The burden is not displaced at the outset, but it may shift once the Department establishes prima facie circumstances such as foreign markings, seizure from possession, absence of supporting documents, and other surrounding facts pointing to illicit import. On the facts, the goods were of foreign origin, were found in possession of the respondents, and no documents were produced to show lawful purchase or duty-paid status.

Conclusion: The Department discharged the initial burden and the onus shifted to the respondents, who failed to prove lawful acquisition. The goods were held to be smuggled and liable to confiscation.

Final Conclusion: The appeal was allowed, the Tribunal's order was set aside, and the confiscation and allied orders passed by the original and appellate authorities were restored.

Ratio Decidendi: In cases not governed by Section 123 of the Customs Act, 1962, the Department must first prove smuggling on a preponderance of circumstances, and once prima facie evidence is established, the burden shifts to the possessor to prove lawful acquisition or duty-paid character of the goods.

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