Burden of proof for non-notified goods under customs law defeated confiscation where lawful acquisition was evidenced through e-auction.

For goods not notified under Section 123 of the Customs Act, 1962, the burden remained on the Revenue to prove that the cut betel nuts were of foreign origin and smuggled before confiscation or penalty could be sustained. The assessee's e-auction release order and subsequent invoice evidenced lawful acquisition, and the Revenue failed to rebut that showing. Confiscation was therefore unsustainable, and the redemption fine, customs duty and penalty could not be levied.

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Issues: Whether the confiscation of cut betel nuts, together with the consequential redemption fine, customs duty and penalty, was sustainable when the goods were not notified under Section 123 of the Customs Act, 1962 and the assessee produced evidence of lawful acquisition through e-auction.

Analysis: The goods in question were not prohibited, restricted, or notified under Section 123 of the Customs Act, 1962. Once that position was established, the burden lay on the Revenue to prove that the goods were of foreign origin and smuggled into India. The assessee produced the release order showing purchase of the goods through e-auction and also an invoice evidencing subsequent sale, thereby demonstrating lawful procurement. The Revenue failed to discharge the burden of proving smuggled nature or foreign origin of the goods.

Conclusion: The confiscation was not sustainable, and the redemption fine, customs duty and penalty were not leviable. The appeal was therefore allowed in favour of the assessee.

Ratio Decidendi: For goods not notified under Section 123 of the Customs Act, 1962, the burden remains on the Revenue to prove smuggled foreign origin before confiscation or penalty can be sustained.

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