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Issues: (i) Whether confiscation of the seized used garments was sustainable when the goods were not notified under Section 123 of the Customs Act, 1962 and the Department had not established smuggling; (ii) Whether, if the confiscated goods had already been sold, the applicant was entitled only to the sale proceeds and not to market value.
Issue (i): Whether confiscation of the seized used garments was sustainable when the goods were not notified under Section 123 of the Customs Act, 1962 and the Department had not established smuggling.
Analysis: The goods were old and used garments, not notified goods, and the statutory presumption under Section 123 was therefore unavailable. The record showed only some foreign markings and a general suspicion based on proximity to the border, which was insufficient to prove unauthorised importation. The applicant produced evidence of purchase from an auctioneer, and the Department failed to establish a nexus showing that the goods were smuggled. In these circumstances, benefit of doubt was warranted.
Conclusion: Confiscation was not sustainable and was set aside in favour of the applicant.
Issue (ii): Whether, if the confiscated goods had already been sold, the applicant was entitled only to the sale proceeds and not to market value.
Analysis: The relief was confined to compensation measured by the sale proceeds if the goods were no longer available. The claim for market value was rejected because the authorities treated the matter as one of redemption or confiscation under customs law, not damages for contractual breach.
Conclusion: The applicant was entitled, if the goods had been disposed of, only to the sale proceeds and not to market value.
Final Conclusion: The revision succeeded, confiscation was annulled, and any compensatory relief was limited to the sale proceeds of the goods if they had already been disposed of.
Ratio Decidendi: In respect of old and used, non-notified goods, confiscation cannot be sustained on mere suspicion or partial foreign markings unless the Department proves smuggling; where the goods are no longer available, compensation is confined to the sale proceeds realised on disposal.
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