Circumstantial evidence and burden shifting can sustain confiscation of foreign-origin goods despite no direct proof of illegal import.

Foreign-origin goods found in unexplained possession can justify confiscation under the Customs Act even without direct proof of illegal import. Where the goods are in the custody and control of the possessor, no satisfactory purchase records are produced, and the possessor's statements are inconsistent, circumstantial evidence and adverse inference may be relied on. In such circumstances, the burden may shift to the possessor to explain facts within personal knowledge, and direct evidence of import is not indispensable. The court treated the Tribunal's insistence on direct proof as incorrect and upheld confiscation under section 111(d) on the basis of the surrounding evidence and applicable presumptions.

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Issues: Whether the Tribunal was justified in setting aside confiscation of foreign-origin goods on the ground that the customs authorities had not proved illegal importation, and whether the circumstances and the respondents' statements were sufficient to shift the burden and support confiscation under the Customs Act.

Analysis: The goods were found in the custody and control of the respondents, were admittedly of foreign origin, and no satisfactory explanation or purchase documents were produced. The respondents' own statements under section 108 of the Customs Act were inconsistent with the later claim that the goods were covered by bills of entry. In such circumstances, the burden could shift to the persons in possession to explain facts especially within their knowledge, and adverse inference could be drawn from the totality of circumstances. The Tribunal erred in treating the absence of direct evidence of illegal import as ative and in ignoring the evidentiary effect of the respondents' unexplained possession and shifting stands. The confiscation ordered by the Commissioner under section 111(d) of the Customs Act was therefore supported by the evidence and the applicable legal presumptions.

Conclusion: The Tribunal's order was unsustainable and the confiscation order was restored; the petition succeeded in favour of the Revenue.

Ratio Decidendi: In cases involving foreign-origin goods found in unexplained possession, illegal importation may be proved by circumstantial evidence, and the burden may shift to the possessor to explain facts specially within his knowledge; direct evidence of import is not indispensable where the surrounding circumstances justify the inference of smuggling.

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