Notified gold under customs law: failure to prove lawful source sustained confiscation, with penalty reduced for limited carrier role.

Gold, as a notified item under Section 123 of the Customs Act, carries a burden on the person in possession to prove lawful source and procurement. Where the appellant was found carrying foreign-inscribed gold biscuits without supporting documents, the explanation that he was only a carrier did not rebut that statutory burden and the finding of smuggling was sustained. The absolute confiscation of the gold and penalty under Section 112(b) were therefore maintained, although the penalty was reduced in view of the appellant's limited role as a carrier.

---

---

Issues: Whether the absolute confiscation of gold and the penalty imposed under Section 112(b) of the Customs Act, 1962 were sustainable, and whether the penalty required reduction having regard to the appellant's role as a carrier.

Analysis: Gold is a notified item under Section 123 of the Customs Act, 1962, and the person in possession must prove lawful source and procurement. The appellant was found carrying 12 pieces of foreign-inscribed gold biscuits weighing 1199.570 grams without any supporting document. The explanation that he was merely a carrier did not displace the statutory burden, and the finding of smuggling was maintained. However, the appellant's limited role as a carrier earning a small amount was taken into account while considering the quantum of penalty.

Conclusion: The absolute confiscation of the gold and the imposition of penalty under Section 112(b) were upheld, but the penalty was reduced to Rs.1,00,000/-.

Final Conclusion: The appeal succeeded only to the limited extent of reduction of penalty, while the confiscation and the finding of liability were sustained.

Ratio Decidendi: In respect of notified goods under Section 123 of the Customs Act, 1962, failure to prove lawful possession or source justifies confiscation and penalty, though the quantum of penalty may be moderated based on the carrier's limited role.

---