Section 123 presumption under the Customs Act does not apply to police seizure, requiring reconsideration without burden shifting.

The statutory presumption under Section 123 of the Customs Act, 1962 does not apply where goods are initially seized by the police, because such seizure does not attract the burden-shifting rule against the possessor and handing the goods to customs does not create a fresh seizure for that purpose. On that basis, the confiscation and penalty order, insofar as it rested on Section 123, could not stand. The matter was remitted to the original authority for reconsideration without applying the statutory presumption.

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Issues: Whether the statutory presumption under Section 123 of the Customs Act, 1962 could be invoked when the seizure was effected by the police authorities, and whether the matter required reconsideration without applying that presumption.

Analysis: The plea on inapplicability of Section 123 was entertained as a pure question of law. The applicable legal position was treated as settled by earlier judicial authority that the burden-shifting presumption under Section 123 does not apply where the initial seizure is made by the police. A seizure by police does not amount to a seizure attracting the statutory presumption against the person from whose possession the goods were taken, and transfer of the goods to customs does not create a fresh seizure for that purpose. On that basis, the order confirming confiscation and penalty, insofar as it proceeded on Section 123, could not stand.

Conclusion: The presumption under Section 123 of the Customs Act, 1962 was held inapplicable to the facts of the case, and the matter was remitted to the original authority for reconsideration without applying that presumption, in favour of the appellant.

Ratio Decidendi: The statutory presumption shifting the burden of proof under Section 123 of the Customs Act, 1962 is not attracted where the goods are initially seized by the police authorities.

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