Burden of proof for smuggled gold under Customs law failed where domestic purchase trail was documented and no corroboration existed.

Seized gold bar was treated as a confiscable smuggled good only if the revenue could show reasonable belief that it was of foreign origin or had entered through an illicit route. The gold was traced through a documented domestic chain of transactions, and no corroborative evidence established smuggling. Section 123 of the Customs Act, 1962 was therefore not attracted on these facts, and the absence of cross-examination of the principal witness, together with the lack of supporting material, further weakened the confiscation case. Confiscation and penalty were held unsustainable, and the appeal was rejected.

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Issues: Whether the seized gold bar was liable to confiscation as smuggled goods and whether the burden under Section 123 of the Customs Act, 1962 was attracted on the facts of the case.

Analysis: The gold bars were found to have moved through a documented domestic chain of transactions, with purchase traced from M/s. Kundan Care Products Ltd. to M/s. J.J. House Pvt. Ltd. and then to M/s. Dutta Bullion Mart. The revenue did not produce corroborative evidence to establish that the particular gold bar was of foreign origin or had entered the country through an illicit route. In such circumstances, the statutory burden under Section 123 arises only when there is a reasonable belief that the goods are smuggled, which was not established here. The absence of cross-examination of the principal witness and the lack of supporting material further weakened the case for confiscation.

Conclusion: The gold bar was not proved to be smuggled goods, Section 123 of the Customs Act, 1962 was inapplicable, and the confiscation and penalty were not sustainable. The appeal was rejected.

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