Burden to prove smuggling remained on customs where goods were non-notified and statements were retracted, defeating confiscation.

Computer accessories found to be non-notified and available under OGL were outside the presumption under Section 123 of the Customs Act, so the burden remained on the department to prove smuggling. Reliance on immediately retracted statements was insufficient to establish that the goods had been smuggled into India, and the mere failure to disclose the seller or source of purchase did not by itself discharge that burden. On those facts, confiscation of the goods was unsustainable, and the consequential confiscation of the car and all related penalties were also set aside.

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Issues: Whether the confiscation of computer accessories and the consequential confiscation of the car and penalties were sustainable when the goods were non-notified and the department relied on retracted statements to prove smuggling.

Analysis: The goods were found to be non-notified and available under OGL, so the presumption under Section 123 of the Customs Act, 1962 did not apply and the burden remained on the department to prove smuggling. The department relied mainly on the statements of two persons, but those statements were immediately retracted. The mere failure to disclose the identity of the seller or source of purchase was held insufficient, by itself, to discharge the burden of proving that the goods had been smuggled into India.

Conclusion: The confiscation of the goods was unsustainable and was set aside. The penalties on the persons concerned were also set aside, and the confiscation of the car and the penalty on the owner were likewise set aside.

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