Burden of proving smuggled import remains on Customs for non-notified goods; suspicion alone cannot justify confiscation.

For non-notified imported goods, the Customs Department must prove smuggled import by positive and affirmative evidence before confiscation or penalties can be sustained. Mere suspicious possession, absence of octroi receipts, or lack of MRP stickers is insufficient to discharge that burden. The principle in Section 106 of the Indian Evidence Act does not shift the burden to the possessor in these circumstances, and unlawful import cannot be inferred from possession alone. Supporting material showing lawful import further weakens the Department's case.

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Issues: Whether, in respect of non-notified imported goods, the Customs Department had discharged the burden of proving smuggled nature so as to justify confiscation and penalties.

Analysis: The goods were not notified under Section 123 of the Customs Act, 1962, and therefore the burden remained on the Department to establish illegal importation by positive evidence. The record disclosed no such evidence, and mere absence of octroi receipts or MRP stickers was held insufficient to prove smuggling. The principle underlying Section 106 of the Indian Evidence Act, 1872 did not shift the burden onto the respondents in the circumstances of the case. The respondents had also produced material supporting lawful import, and the Board's circular on town seizures reinforced that unauthorised possession alone is not enough; there must be evidence relevant to unauthorised importation.

Conclusion: The Department failed to prove smuggled import of the non-notified goods, so confiscation and penalties were unsustainable and the appeals failed.

Ratio Decidendi: For non-notified goods, the Customs Department must prove smuggled import by relevant and affirmative evidence; mere suspicious possession or absence of ancillary documents does not discharge that burden or justify confiscation.

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