Section 106 evidence rule does not remove the Department's initial burden to prove illegal importation or smuggling.

The principle underlying Section 106 of the Indian Evidence Act, 1872 may ease the Department's burden where relevant facts are within the special knowledge of the person proceeded against, but it does not displace the initial obligation to adduce some evidence of illegal importation or smuggling. Mere discrepancies in description and country of origin were insufficient to prove that the seized goods were smuggled, and the Department failed to produce material meeting that burden. The dispute was essentially factual, so no substantial question of law arose.

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Issues: Whether the Department was relieved of its burden to prove illegal importation and smuggling of the seized goods merely because the facts were within the special knowledge of the person proceeded against, and whether the appeal disclosed any substantial question of law.

Analysis: The burden under the principle underlying Section 106 of the Indian Evidence Act, 1872 may be lightened where relevant facts are especially within the knowledge of the person concerned, but it is not wholly displaced. The Department must still adduce some evidence to show that the goods entered the country illegally and were smuggled goods. On the facts, the discrepancies noticed in description and country of origin did not by themselves establish smuggling, and the Department failed to produce material sufficient to discharge its burden. The finding of the Tribunal therefore did not rest on an legal principle, and the dispute was essentially factual.

Conclusion: The burden remained on the Department to establish smuggling, and it failed to do so. No substantial question of law arose.

Final Conclusion: The challenge to the Tribunal's order failed and the Customs appeal was dismissed.

Ratio Decidendi: Section 106 of the Indian Evidence Act, 1872 does not absolve the Department of the initial burden to adduce some evidence of illegal importation or smuggling; it only eases that burden where special knowledge lies with the opposite party.

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