Burden of proving smuggling remains with Revenue absent Section 123 notification; confiscation failed for goods and currency

Foreign-origin mobile phones and parts could not be confiscated without a Section 123 notification shifting the burden of proof, because the goods were not notified and the Revenue failed to affirmatively prove smuggling; mere foreign origin and absence of purchase documents were insufficient. Indian currency also could not be confiscated as alleged sale proceeds of smuggled goods because the record did not establish any sale, purchaser, or nexus with smuggled goods. The confiscations and penalties were therefore set aside, and relief was granted to the assessee.

---

---

Issues: (i) Whether the confiscation of foreign-origin mobile phones and parts was sustainable in the absence of a notification shifting the burden under the Customs Act. (ii) Whether the confiscation of Indian currency as alleged sale proceeds of smuggled goods was sustainable.

Issue (i): Whether the confiscation of foreign-origin mobile phones and parts was sustainable in the absence of a notification shifting the burden under the Customs Act.

Analysis: The goods were seized under Section 110 of the Customs Act, 1962, but the goods were not notified under Section 123 of the Customs Act, 1962. In such a situation, the burden remained on the Revenue to prove that the goods were smuggled. No evidence was produced to establish smuggling, and mere foreign origin or non-production of purchase documents did not create a presumption of smuggled nature.

Conclusion: The confiscation of the mobile phones and parts was not sustainable and was set aside in favour of the assessee.

Issue (ii): Whether the confiscation of Indian currency as alleged sale proceeds of smuggled goods was sustainable.

Analysis: There was no evidence linking the currency to the sale proceeds of smuggled goods. The record did not establish any specific sale, purchaser, or nexus between the currency and any smuggled goods. In the absence of proof of such linkage, confiscation of the currency could not be upheld.

Conclusion: The confiscation of the Indian currency was not sustainable and was set aside in favour of the assessee.

Final Conclusion: The impugned confiscations and penalties could not be sustained on the evidence, and the assessee was entitled to relief.

Ratio Decidendi: Where goods are not covered by a burden-shifting notification, the Revenue must affirmatively prove smuggling, and confiscation cannot rest merely on foreign origin or unsupported suspicion; consequential confiscation of currency also fails without proof of nexus to smuggled goods.

---