Uncorroborated retracted statement cannot prove smuggled origin, so confiscation and penalty on seized goods fail.

The Department failed to prove that the seized ball bearings were smuggled goods because the only incriminating material was a partner's statement based on hearsay, which was promptly retracted and remained uncorroborated. No independent evidence was obtained, including any statement from the alleged supplier, and the changing version on the source of the goods further weakened reliability. On these facts, the burden to establish smuggled nature was not discharged, so confiscation and penalty could not be sustained.

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Issues: Whether the seized ball bearings were proved to be smuggled goods so as to justify confiscation and penalty.

Analysis: The only material against the appellants was the statement of a partner, which was hearsay in so far as it attributed smuggled origin on the basis of what dalals allegedly told him. The statement was later retracted at the earliest opportunity before the Magistrate, and its reliability was further weakened by the change in version regarding the source of the goods. No independent corroboration was obtained, particularly because no statement was recorded from the alleged supplier. In these circumstances, the burden to establish smuggled nature was not discharged by the Department.

Conclusion: The seizure was not proved to involve smuggled goods and the confiscation and penalty were not sustainable.

Ratio Decidendi: Where seized foreign-origin goods are not covered by the statutory presumption and the only incriminating material is an uncorroborated and promptly retracted statement, the Department must independently prove smuggled nature before confiscation or penalty can be upheld.

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