Customs presumption under section 123 applies only to covered goods; video cassette tapes fell outside it and burden stayed on Revenue.

Section 123 of the Customs Act, 1962 applies only to goods expressly covered by the provision or by a valid notification issued under it; because video cassette tapes were not included in the relevant notification, the statutory presumption did not arise and the Revenue retained the burden of proving smuggling. On confiscation and penalty, the Tribunal treated the default as technical, held that absolute confiscation was excessive on the facts, and substituted redemption on payment of fine while reducing the personal penalty. The result was that the burden-of-proof issue was resolved in favour of the appellant and the confiscation and penalty were substantially scaled down.

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Issues: (i) Whether video cassette tapes were covered by the statutory presumption under section 123 of the Customs Act, 1962, so that the burden shifted to the appellant to prove lawful import; (ii) whether absolute confiscation and the penalty imposed were justified on the facts, or required reduction.

Issue (i): Whether video cassette tapes were covered by the statutory presumption under section 123 of the Customs Act, 1962, so that the burden shifted to the appellant to prove lawful import.

Analysis: Section 123 applies only to goods specifically covered by the provision or by a notification issued under it. The relevant notification specified certain goods for the purpose of section 123, but video cassettes were not included in that notification. Notification No. 205/84-Cus. was issued under section 11B of the Customs Act, 1962 and did not make section 123 applicable to video cassettes. In the absence of such coverage, the initial burden remained on the Revenue to establish smuggling, and the evidence placed did not discharge that burden for the video cassettes.

Conclusion: The statutory presumption under section 123 did not apply to the video cassette tapes, and the burden remained on the Revenue.

Issue (ii): Whether absolute confiscation and the penalty imposed were justified on the facts, or required reduction.

Analysis: The Tribunal accepted confiscation in respect of certain items where the appellant had not satisfactorily established lawful origin, but held that absolute confiscation was excessive on the facts. The nature of the default was treated as technical, and the circumstances did not justify the full penalty imposed. The Tribunal therefore substituted redemption on payment of fine for the items covered by confiscation and reduced the personal penalty.

Conclusion: Absolute confiscation and the original penalty were not sustained in full; the relief was modified in favour of the appellant.

Final Conclusion: The appeal succeeded in part, with the burden-of-proof ruling made in favour of the appellant and the confiscation and penalty substantially scaled down.

Ratio Decidendi: The presumption as to smuggled goods under section 123 of the Customs Act, 1962 arises only for goods expressly covered by that provision or by a valid notification under it; where the goods are not so covered, the Revenue must prove smuggling, and confiscation or penalty cannot rest on a shifted burden alone.

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