Section 123 customs presumption is limited to covered goods and persons; confiscation failed for insufficient proof.
Section 123 of the Customs Act applies only to the goods and persons expressly covered by the statute, and its burden-shifting presumption cannot be extended by inference. The seized jewellery was treated as commercial goods, not bona fide baggage, so the controversy fell within customs confiscation and allied penalties rather than an exclusive revisionary baggage remedy. On the evidence, including travel history, diary entries, worker statements and post-seizure inferences, the alleged smuggled import was not proved with sufficient certainty. The confiscation and personal penalties were therefore unsustainable, and the impugned order was set aside with consequential relief.
Issues: (i) Whether the dispute was excluded from the Tribunal's appellate jurisdiction because the goods were said to be baggage and a revision lay to the Government of India. (ii) Whether the confiscation and penalties could be sustained on the basis of section 123 of the Customs Act, 1962 and the surrounding evidence.
Issue (i): Whether the dispute was excluded from the Tribunal's appellate jurisdiction because the goods were said to be baggage and a revision lay to the Government of India.
Analysis: The finding of the lower authority was that the seized jewellery could not be treated as bona fide household baggage and had been brought for commercial purpose. Once the goods stood excluded from baggage treatment, the controversy related to confiscation and allied penalties under the Customs Act and not to a pure baggage assessment matter. On that footing, the suggested revisionary route was not available as an exclusive remedy.
Conclusion: The objection to the Tribunal's jurisdiction failed.
Issue (ii): Whether the confiscation and penalties could be sustained on the basis of section 123 of the Customs Act, 1962 and the surrounding evidence.
Analysis: Section 123 operates only in the limited class of goods specified by the statute and only where seizure is made in reasonable belief that the goods are smuggled. The provision shifts the burden only from the person from whose possession the goods were seized, and from any claimant owner, and cannot be extended to impose a presumption upon persons who were neither shown to be in possession of the seized goods nor shown to be claimants. The Court further held that, after the 1989 legislative change, the presumption could not be carried to jewellery with diamonds embedded in it in the manner urged by Revenue. The circumstances relied upon, including travel history, diary entries, statements of workers and post-seizure inferences, did not establish illicit import of the impugned goods with the degree of proof required to sustain confiscation and personal penalties.
Conclusion: The confiscation and penalties were not sustainable against the appellants.
Final Conclusion: The impugned order was set aside and the appeals were allowed with consequential relief.
Ratio Decidendi: The statutory presumption under section 123 of the Customs Act, 1962 is confined to the goods and persons expressly covered by it, and cannot be extended by inference to impose confiscation or penalty absent legally sufficient proof of smuggled import and lawful trigger of the burden-shifting mechanism.
TaxTMI 
AI Drafter ✕
TaxTMI 
