Proof of foreign origin and valid statutory burden under customs law failed, and gold purity evidence was also insufficient.

In a smuggled gold prosecution, the Court held that foreign origin and unlawful import under the Customs Act had to be proved independently; foreign-style markings and suspicious circumstances were insufficient without direct evidence, so the customs charge failed. Section 123 did not shift the burden because the slabs were first in police possession and were not seized from the accused's possession within the statutory meaning, leaving the burden on the prosecution. The Defence of India Rules charge also failed because there was no proof that the gold met the required purity threshold, and additional evidence could not be admitted merely to cure a prosecution lacuna.

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Issues: (i) Whether the prosecution proved that the gold slabs were of foreign origin and imported into India in contravention of the prohibitory notification so as to sustain liability under the Customs Act, 1962. (ii) Whether the burden under section 123 of the Customs Act, 1962 shifted to the accused on the facts of the seizure. (iii) Whether the charge under the Defence of India Rules was proved, including whether the gold satisfied the statutory purity requirement and whether additional evidence could be permitted at the appellate stage.

Issue (i): Whether the prosecution proved that the gold slabs were of foreign origin and imported into India in contravention of the prohibitory notification so as to sustain liability under the Customs Act, 1962.

Analysis: For an offence under section 135(b) of the Customs Act, 1962 read with section 111(d), the prosecution had to establish that the goods were liable to confiscation because they were imported contrary to the applicable prohibition. The Court found that the only material relied on to show foreign origin was the foreign-style marking on the slabs. There was no direct evidence that the slabs were imported from outside India, and the markings alone were insufficient to prove foreign origin or smuggling beyond reasonable doubt. The surrounding circumstances, including concealment and the accused's demeanour, were also held insufficient to justify the necessary inference.

Conclusion: The prosecution failed to prove the Customs Act charge, and the conviction on that count could not stand, in favour of the appellant.

Issue (ii): Whether the burden under section 123 of the Customs Act, 1962 shifted to the accused on the facts of the seizure.

Analysis: The statutory burden applies only where goods are seized under the Act from the possession of the person concerned. Here, the slabs had first been taken into police possession and were thereafter produced before the customs authority, which then seized them. On that footing, the seizure was not from the accused's possession within the meaning of section 123. The Court treated the prior possession of the police as breaking the statutory condition for shifting the burden to the accused.

Conclusion: Section 123 did not apply, so the burden remained on the prosecution, in favour of the appellant.

Issue (iii): Whether the charge under the Defence of India Rules was proved, including whether the gold satisfied the statutory purity requirement and whether additional evidence could be permitted at the appellate stage.

Analysis: The Defence of India Rules applied only to gold of the requisite purity, namely gold of not less than nine carats. There was no evidence that the seized slabs met that requirement. The prosecution's request to adduce additional evidence through the appellate court was rejected because the omission was a lacuna in the prosecution case, and the appellate power to take additional evidence could not be used to repair negligence in proof. On the record as it stood, the ingredients of the Defence of India Rules offences were not established.

Conclusion: The Defence of India Rules charges were not proved and the prayer for additional evidence was rejected, in favour of the appellant.

Final Conclusion: The conviction was unsustainable on both the customs charge and the Defence of India Rules charges, and the accused was entitled to acquittal.

Ratio Decidendi: In a criminal prosecution for smuggled gold, the prosecution must independently prove foreign origin and unlawful import unless the statutory burden validly shifts; where the seizure is not from the accused's possession, section 123 of the Customs Act, 1962 does not operate, and appellate evidence cannot be admitted merely to fill a prosecution lacuna.

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