Burden of proof for smuggled goods remains on customs where statutory presumption does not apply; suspicion is insufficient.

For goods not covered by Section 123 or Chapter IV-A of the Customs Act, the department must first prove that the seized goods are smuggled before any burden shifts to the claimant. The evidence described, consisting mainly of an uncorroborated statement, an alleged purchase link and border-adjacent seizure circumstances, was treated as insufficient because suspicion alone does not establish illicit importation. On that basis, confiscation and penalty were regarded as unsustainable, and the claimant was said to succeed with release of the goods and deletion of penalty.

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Issues: Whether the department discharged the initial burden of proving that the seized readymade garments were smuggled goods and, consequently, whether confiscation of the goods and penalty on the appellant were sustainable.

Analysis: The goods were not notified under Section 123 of the Customs Act, 1962 or under Chapter IV-A of the Customs Act, 1962, so the initial burden remained on the department to establish that the goods were smuggled. The material relied upon consisted mainly of the appellant's statement, the alleged linkage with another person from whom the goods were said to have been purchased, and the surrounding circumstances of seizure near the border at night. The statement that the goods were purchased unlawfully did not by itself establish smuggling, and the surrounding circumstances only raised suspicion. The source from whom the appellant claimed to have purchased the goods was also given the benefit of doubt, which weakened the department's case further. In the absence of clear proof of illicit importation, the burden was not shifted to the appellant.

Conclusion: The department failed to prove that the goods were smuggled in character. Confiscation of the goods and imposition of penalty were not sustainable and the appellant succeeded.

Final Conclusion: The appeal was allowed and the appellant obtained release of the confiscated goods with deletion of the penalty.

Ratio Decidendi: Where goods are not covered by Section 123 or Chapter IV-A, the department must first prove smuggled character, and mere suspicion, surrounding circumstances, or an uncorroborated admission is insufficient to shift the burden to the claimant.

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