Reverse burden for foreign-origin gold applies on credible seizure circumstances, but higher customs penalty needs proof of statutory value threshold.

Foreign-origin gold biscuits concealed in a vehicle attracted the reverse burden under Section 123 of the Customs Act because the seizure circumstances, the accused's admission, and the officer's reasonable belief supported the inference of smuggled origin; the retraction was not proved sufficient to displace that burden. The conviction could not, however, be sustained under Section 135(1)(i) without proof that the gold exceeded the statutory value threshold on the relevant date, as market value and purity were not independently established. Conviction was therefore confined to Section 135(1)(ii), with the higher clause set aside.

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Issues: (i) Whether the seized gold biscuits were of foreign origin so as to attract the burden under Section 123 of the Customs Act; (ii) Whether the conviction was sustainable under Section 135(1)(i) of the Customs Act or only under Section 135(1)(ii) of the Customs Act in the absence of proof of value.

Issue (i): Whether the seized gold biscuits were of foreign origin so as to attract the burden under Section 123 of the Customs Act.

Analysis: The seizure of gold biscuits from a radio cassette recorder concealed in the car, coupled with the accused's statement admitting foreign origin and the officer's reasonable belief that the goods were smuggled, brought the case within the scope of the reverse burden. The retraction was not supported by evidence sufficient to displace the earlier admission or to show coercion. The accused did not adduce any material to prove that the gold was not of foreign origin.

Conclusion: The burden under Section 123 of the Customs Act shifted to the accused, and the finding that the gold was of foreign origin was upheld in favour of the Revenue.

Issue (ii): Whether the conviction was sustainable under Section 135(1)(i) of the Customs Act or only under Section 135(1)(ii) of the Customs Act in the absence of proof of value.

Analysis: To sustain clause (i), the prosecution had to prove that the value of the seized gold exceeded the statutory threshold. The evidence did not establish the market value on the relevant date, and the purity/value was not independently proved. On the proved facts, only the possession of foreign-origin gold stood established.

Conclusion: Conviction under Section 135(1)(i) of the Customs Act was not sustainable, but conviction under Section 135(1)(ii) of the Customs Act was upheld.

Final Conclusion: The acquittal on the foreign-origin issue was set aside, the offence was brought within the lesser penal clause, and the matter was disposed of by modifying the conviction and sentence accordingly.

Ratio Decidendi: Where seizure is accompanied by circumstances creating reasonable belief of smuggled foreign-origin gold, the burden shifts to the accused under Section 123 of the Customs Act; but a conviction under the higher penal clause cannot stand unless the prosecution proves the requisite value threshold.

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