Burden of proof in confiscation proceedings failed where seized gold, currency and vehicle were not shown to be of smuggled origin.

Confiscation of seized gold, foreign currency, Indian currency and a vehicle was not justified where the Department failed to prove smuggled origin or illicit use by independent and corroborative evidence. The gold was found in a town area, bore no foreign marking, and the record did not establish smuggling; an affidavit and Wasiyatnama supporting inherited family jewellery converted into gold also pointed to lawful acquisition. Mere possession of foreign currency was insufficient to treat it as smuggled, the Indian currency was not shown to be sale proceeds of smuggled goods, and the vehicle was not proved to have been used for smuggling. Penalties therefore were not sustainable.

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Issues: Whether the seized gold, foreign currency, Indian currency and vehicle were liable to confiscation and whether penalties could be sustained.

Analysis: The gold was seized in a town area, not at an international border or port, and bore no foreign marking. The authorities relied mainly on purity of the gold and surrounding circumstances, but the record did not establish, by independent and corroborative material, that the gold was of smuggled origin. The appellant produced an affidavit and a Wasiyatnama showing the source of the gold as inherited family jewellery converted into gold, which supported lawful procurement. The same reasoning applied to the foreign currency, Indian currency and vehicle: mere possession of foreign currency was insufficient to treat it as smuggled, the Indian currency was not proved to be sale proceeds of smuggled goods, and the vehicle was not shown to have been used for smuggling. The Department failed to discharge the burden needed to justify confiscation and penalties.

Conclusion: The confiscation of the gold, foreign currency, Indian currency and vehicle was not sustainable, and the penalties were also not sustainable.

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