Customs confiscation requires proof of smuggled origin; an unrebutted purchase invoice can defeat suspicion alone.

Suspicion alone was held insufficient to sustain confiscation of a gold chain as smuggled foreign-origin goods. The analysis emphasised that, where seizure occurred away from the border and there were no foreign markings, concealment, or other direct indicators of illegal import, the evidentiary burden under the Customs Act was not met. Non-production of purchase documents at interception did not by itself prove smuggling, especially where a later-produced tax invoice from a GST-registered jeweller remained unrebutted and no inquiry was made at the seller's end. Section 123 may support seizure on suspicion, but confiscation requires affirmative proof of smuggled character.

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Issues: Whether the gold chain was shown to be of smuggled foreign origin so as to justify confiscation and penalty, and whether non-production of purchase documents at the time of seizure, despite a later-produced invoice and surrounding circumstances, could sustain confiscation.

Analysis: The seizure occurred away from the international border, the gold chain was not concealed, and no foreign markings or other direct evidence of foreign origin were shown. The Revenue relied mainly on the absence of documents at the time of interception, but the assessee later produced a tax invoice showing purchase from a GST-registered jeweller. The invoice was not shown to be false or fabricated, and no inquiry was made at the seller's end to discredit it. The laboratory report showing 99.5% purity did not by itself establish smuggled foreign origin. On these facts, the evidentiary burden for confiscation under the Customs Act was not discharged; suspicion could support seizure, but not confiscation in the absence of tangible proof of illegal import.

Conclusion: The gold chain was not proved to be smuggled foreign-origin goods, and confiscation and penalty were not justified. The Revenue appeal was rightly rejected.

Ratio Decidendi: Under Section 123 of the Customs Act, 1962, suspicion may justify seizure, but confiscation under Section 111 requires affirmative evidence of smuggled character and cannot rest merely on non-production of documents at the time of seizure when a plausible purchase document remains unrebutted.

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