Section 123 presumption and misjoinder principles limit customs adjudication when seizures lack possession linkage and common nexus.

Section 123 of the Customs Act applies only when notified goods are seized from the possession of the person proceeded against, so the burden shifts only in that situation; goods first seized by police from open fields and later handed to customs did not attract the presumption. Separate seizures made on different dates and from different places could not be clubbed in one adjudication without proof of a common transaction or legal nexus, and such misjoinder was impermissible. The evidence also failed to establish the third appellant's possession of, or connection with, the Nellore seizure, since the record showed suspicion rather than proof.

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Issues: (i) Whether the presumption under Section 123 of the Customs Act, 1962 could be invoked in respect of goods first seized by the police from open fields and later handed over to the customs authorities; (ii) Whether different seizures made on different dates and from different places could be clubbed together in one adjudication absent a legal nexus or evidence of a common transaction; (iii) Whether the material on record satisfactorily connected the third appellant with the seizure from the Nellore premises.

Issue (i): Whether the presumption under Section 123 of the Customs Act, 1962 could be invoked in respect of goods first seized by the police from open fields and later handed over to the customs authorities.

Analysis: Section 123 operates only when notified goods are seized from the possession of the person concerned, so that the burden shifts to that person to prove lawful import. The goods in question were initially seized by the police from open ground and then handed over to the customs authorities. On that footing, the appellants could not be treated as persons from whose possession the goods were taken, and the statutory presumption was inapplicable.

Conclusion: The presumption under Section 123 could not be invoked against the appellants for the first two seizures.

Issue (ii): Whether different seizures made on different dates and from different places could be clubbed together in one adjudication absent a legal nexus or evidence of a common transaction.

Analysis: Separate seizures from different locations and on different dates cannot be combined in a single adjudication unless there is evidence linking them as part of one transaction or showing a common design. No such nexus or conspiracy was established. Clubbing unrelated seizures in one proceeding was therefore prejudicial and amounted to an impermissible misjoinder.

Conclusion: The clubbing of the different seizures in one adjudication was not sustainable.

Issue (iii): Whether the material on record satisfactorily connected the third appellant with the seizure from the Nellore premises.

Analysis: The evidence did not clearly establish that the third appellant was in possession of the premises or otherwise connected with the recovered goods. The statements recorded from the person in control of the house did not identify the third appellant, and the record showed at best suspicion, not proof. Mere suspicion cannot replace legal proof.

Conclusion: The third appellant's connection with the seized goods was not proved.

Final Conclusion: The impugned penalty order could not be sustained, and the appellants were entitled to relief.

Ratio Decidendi: The presumption under Section 123 of the Customs Act, 1962 arises only when notified goods are seized from the possession of the person proceeded against, and unrelated seizures cannot be combined in one adjudication without a demonstrated legal nexus.

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