Burden of proof for foreign-marked gold and confiscation turns on vouchers, retracted statements, and corroboration.

Foreign-marked gold bars were held not liable to confiscation where purchase vouchers were accepted for part of the seized goods, the remaining records could not be reliably correlated with the seizure, and the incriminating statement of the co-noticee had been retracted without independent corroboration; on that material, the statutory burden under Section 123 was treated as discharged and confiscation and penalty were set aside. By contrast, foreign currency recovered from the co-noticee's premises was sustained in confiscation, along with the related penalty, because no sufficient basis was shown to dislodge the finding against its release. The differing outcomes turned on the adequacy of documentary proof and corroboration in each seizure.

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Issues: (i) Whether confiscation of 32 foreign-marked gold bars and penalty on the claimant were sustainable under the Customs Act, 1962; (ii) whether confiscation of foreign currency and penalty on the co-noticee were liable to interference.

Issue (i): Whether confiscation of 32 foreign-marked gold bars and penalty on the claimant were sustainable under the Customs Act, 1962.

Analysis: The purchase vouchers produced by the claimant were accepted to the extent of two gold bars, and the adjudicating authority itself found difficulty in correlating the remaining records with the seized gold. The reliance placed on the initial statement of the co-noticee was weakened by its retraction, and there was no independent corroboration sufficient to sustain a finding of smuggled character for the remaining gold. In the circumstances, the onus under Section 123 stood discharged on the material available, and brand-wise accounting failure by itself could not justify confiscation or penalty.

Conclusion: Confiscation of the 32 gold bars and the penalty on the claimant were not sustainable.

Issue (ii): Whether confiscation of foreign currency and penalty on the co-noticee were liable to interference.

Analysis: The foreign currency was recovered from the co-noticee's premises, and no specific ground was made out for its release. The explanation offered was not accepted, and no sufficient basis was shown to dislodge the finding supporting confiscation and penalty.

Conclusion: Confiscation of the foreign currency and the penalty on the co-noticee were sustained.

Final Conclusion: The appeal of the claimant was allowed, while the appeal of the co-noticee failed, leaving the confiscation of foreign currency and the related penalty undisturbed.

Ratio Decidendi: Where the statutory burden in respect of foreign-marked gold is discharged by purchase documents and the incriminating statement is retracted without independent corroboration, confiscation and penalty cannot be sustained merely on incomplete brand-wise correlation.

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