Smuggled goods must be proved with evidence, not assumed from recovery circumstances; confiscation was set aside and release ordered.

Silver slabs recovered in India and handed to Customs after more than two months were not proved to be smuggled goods of Nepali origin because they bore no markings and there was no evidence linking them to unlawful import from Nepal. The adjudicating authority had not discussed material establishing smuggling, and the recovery circumstances alone could not justify confiscation. On that basis, confiscation was held unsustainable, the appellate order was set aside, release of the silver slabs was directed, and the penalty pre-deposit was held refundable.

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Issues: Whether the silver slabs recovered from the appellant were proved to be smuggled goods of Nepali origin so as to justify confiscation and whether the appellant was entitled to release of the goods and refund of the penalty pre-deposit.

Analysis: The silver slabs were recovered within India by the police and handed over to Customs after more than two months. They bore no markings and there was no material to correlate them with Nepalese origin or to establish that they had been brought into India in violation of law. The adjudicating authority had not discussed evidence showing smuggling from Nepal, and the recovery circumstances did not support the assumption that the goods were smuggled merely because they were later entrusted to Customs.

Conclusion: The confiscation was not sustainable. The order-in-appeal was set aside, release of the silver slabs was directed, and the penalty pre-deposit was held refundable to the appellant.

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