Burden under customs seizure law: lawful procurement evidence defeated smuggling allegation, so confiscation and penalty could not stand.

Synthetic fabrics and synthetic laces seized from the appellant's premises were examined under Section 123 of the Customs Act, so the initial burden to explain lawful import or acquisition rested on the possessor. The appellant discharged that burden by explaining procurement, producing bills of entry and corroborative material, and relying on importers' admissions that part of the goods had been imported and sold to it. The Department produced no material proving smuggling by the appellant, and mere non-production of documents at seizure was insufficient to establish smuggling. On the available material, the goods were not proved to be smuggled, confiscation was not sustainable, and the penalty could not stand.

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Issues: Whether the synthetic fabrics and synthetic laces seized from the appellant's premises were liable to confiscation as smuggled goods, and whether penalty could be imposed on the appellant.

Analysis: The goods were notified under Section 123 of the Customs Act, so the initial burden lay on the person from whose possession they were seized to show lawful import or acquisition. That burden was discharged by the appellant by explaining the source of procurement, producing bills of entry and other corroborative material, and relying on admissions of the importers that part of the goods had been imported and sold to the appellant. The Department did not produce material to show that the goods were smuggled by the appellant. The non-production of documents at the time of seizure, by itself, was not sufficient to establish smuggling. The enquiry committee report, when read in the light of the earlier Tribunal decision on the same material, did not negate the appellant's claim to the extent correlation was possible.

Conclusion: The seized goods were not proved to be smuggled goods, confiscation was not sustainable, and the penalty could not survive.

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