Reverse-onus confiscation demands credible proof of lawful possession; open-market claims alone may not defeat seizure and duty demand.

Goods notified under a reverse-onus confiscation scheme require the claimant to prove lawful possession and non-smuggled character with credible evidence; a bare assertion of open-market purchase is insufficient where no bill, seller identity, source proof, or accounting entry is produced, so confiscation and duty demand on the 10 cartons were sustained. The record did not support the allegation that 134 cartons were used for concealment, so confiscation of those cartons and the related fine were set aside. The truck confiscation was upheld on the surrounding circumstances, the truck-owner's penalty was set aside for want of knowledge, and the penalties on the company and its director were maintained.

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Issues: (i) whether the demand of duty and confiscation of the 10 cartons of nylon filament yarn were sustainable when the appellant claimed purchase from the open market, and (ii) whether the confiscation of the 134 cartons said to have been used for concealment, the truck, and the penalties imposed on the appellants were justified.

Issue (i): Whether the demand of duty and confiscation of the 10 cartons of nylon filament yarn were sustainable when the appellant claimed purchase from the open market.

Analysis: The notice invoked the customs provisions governing seizure and confiscation, and the yarn was a notified commodity to which the statutory burden under the reverse-onus provision applied. Once the department showed seizure of the goods and the appellant was unable to produce any bill, identify the seller, prove the source of purchase, or show accounting entries, the statutory burden of proving lawful possession and non-smuggled character was not discharged. A bare assertion that the goods were bought in the market was held insufficient to rebut the presumption arising under the confiscation scheme.

Conclusion: The demand and confiscation in respect of the 10 cartons were upheld, and this issue was decided against the assessee.

Issue (ii): Whether the confiscation of the 134 cartons said to have been used for concealment, the truck, and the penalties imposed on the appellants were justified.

Analysis: The record did not establish that the 134 cartons had been used to conceal the other cartons in the manner alleged. The seizure material did not demonstrate concealment, and the invoice recovered from the vehicle itself reflected the presence of both sets of cartons, making the allegation of deliberate concealment untenable. On that footing, the confiscation of the 134 cartons and the redemption fine fixed for them could not be sustained. As to penalty, liability remained for the company and its director because of the confiscable nature of the goods, but the truck owner was not shown to have knowledge of the smuggling; however, the confiscation of the truck was upheld because the circumstances of abandonment and flight indicated involvement in the carriage of the goods, though the redemption fine was maintained.

Conclusion: Confiscation of the 134 cartons was set aside and the related redemption fine was reduced; penalty on the truck owner was set aside; confiscation of the truck and the corresponding redemption fine were confirmed; penalties on the company and its director were maintained.

Final Conclusion: The appeal succeeded only to the extent of relief against confiscation of the 134 cartons and the truck-owner's penalty, while the confiscation of the seized 10 cartons, the truck confiscation, and the substantive penalties on the company and its director were sustained or left undisturbed as indicated above.

Ratio Decidendi: When goods are notified for the purpose of the reverse-onus confiscation provision, a mere claim of open-market purchase does not discharge the burden of proving lawful import or non-smuggled character; the claimant must produce credible supporting evidence, and absence of such proof justifies confiscation.

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