Burden of proving third-party ownership defeated confiscation challenge; unreliable affidavits did not require summoning deponents.

Where seized gold ornaments were claimed to belong to third parties, the Tribunal held that the person from whose possession the goods were taken had the burden to displace the statutory presumption of possession and ownership. On the facts, that burden was not discharged, so separate notice to alleged customers was not required and confiscation was sustained. Affidavit evidence was treated as non-conclusive and, given the belated filing, inconsistency with the seizure statement, and lack of contemporaneous support, the authorities were not bound to summon the deponents before rejecting the defence. The reference applications failed because the issues were factual and no referable question of law arose.

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Issues: (i) Whether, on the facts, the authorities were bound to issue notice to the alleged customers before confiscating the seized gold ornaments in view of the provisions relating to notice and the presumption of ownership; (ii) Whether the affidavits filed by the alleged customers and other supporting material had to be accepted or tested by summoning the deponents before rejecting the defence.

Issue (i): Whether, on the facts, the authorities were bound to issue notice to the alleged customers before confiscating the seized gold ornaments in view of the provisions relating to notice and the presumption of ownership.

Analysis: The Tribunal held that the appellants had not established to the satisfaction of the adjudicating authority that the seized ornaments belonged to the alleged customers. The onus under the statutory scheme remained on the person from whose possession the gold was seized to show that it belonged to someone else. In that factual setting, the statutory presumption of possession and ownership operated against the appellants, and the alleged customers were not shown to be identifiable claimants requiring separate notice.

Conclusion: The issue was decided against the appellants and in favour of the Revenue; no notice to the alleged customers was held necessary on the facts found.

Issue (ii): Whether the affidavits filed by the alleged customers and other supporting material had to be accepted or tested by summoning the deponents before rejecting the defence.

Analysis: The Tribunal held that affidavit evidence is not to be treated as conclusive in every case and that its acceptance depends on the totality of circumstances. Here, the affidavits were filed belatedly, were inconsistent with the initial statement recorded at the time of seizure, did not satisfactorily explain the defence, and were unsupported by contemporaneous records. The alleged deponents never came forward to claim the goods, and the adjudicating authority was not bound, on these facts, to summon them for cross-examination before rejecting the affidavits.

Conclusion: The issue was decided against the appellants and in favour of the Revenue; rejection of the affidavits was upheld.

Final Conclusion: The applications for reference failed because the matters raised turned on factual appreciation and did not give rise to any referable question of law.

Ratio Decidendi: Where the statutory burden to establish third-party ownership is not discharged, and affidavit evidence is found unreliable on the totality of circumstances, no question of law arises for reference and confiscation may be sustained without separate notice to unproven claimants.

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