Burden under Section 123 of Customs Act rebutted by purchase and accounting records; confiscation and penalties unsustainable.

In a town seizure of gold bars, credible purchase records, stock registers, GST returns, job work challans and books of account rebutted the presumption of smuggled origin under Section 123 of the Customs Act, 1962. The tribunal held that these documents discharged the evidentiary burden on the appellants, and the gold could not be treated as smuggled merely on suspicion. Confiscation and penalties were therefore unsustainable, and release of the gold was directed.

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Issues: Whether the seized gold bars were liable to confiscation and penalty, and whether the appellants discharged the burden under Section 123 of the Customs Act, 1962 by producing purchase invoices, stock records, GST returns and job work challans.

Analysis: The seizure was of gold in town seizure circumstances, with no foreign-origin marking on the goods. The appellants produced purchase registers, tax invoices, GST returns, job work challans and books of account showing lawful procurement and stock position. On these materials, the presumption of smuggled origin stood rebutted and the evidentiary burden cast by Section 123 of the Customs Act, 1962 was held to have been discharged. In that view, the documents could not be discarded and the goods could not be treated as smuggled merely on suspicion.

Conclusion: The gold was held not liable to confiscation, the penalties were unsustainable, and release of the gold to the appellants was directed.

Ratio Decidendi: In a town seizure of gold, production of credible purchase and accounting records, including GST returns and job work documents, can discharge the burden under Section 123 of the Customs Act, 1962 and rebut the presumption of smuggled origin, making confiscation and penalty unsustainable.

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