Burden of proof in smuggling cases: foreign-origin marks alone cannot sustain confiscation or penalties without reliable evidence.

Confiscation of readymade garments could not be sustained where the department relied only on foreign-origin marks and did not establish, by reliable evidence, that the goods were smuggled. Mere suspicion or the presence of such marks was insufficient to prove smuggling or to shift the burden to the appellants to show lawful acquisition. The appellants' explanation of local purchase and stock accumulation was not specifically disproved on merits. As the smuggled character of the goods was not proved, the finding that the appellants were persons concerned with liable goods also failed, and the penalties were set aside.

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Issues: Whether the confiscation of the readymade garments and the penalties imposed on the appellants were sustainable when the department had not established, by reliable evidence, that the goods were smuggled or that the appellants had dealt with them knowing them to be liable to confiscation.

Analysis: The goods were seized on the basis of a belief that they had been imported illegally and were liable to confiscation, but the material relied upon was limited to some garments bearing foreign-origin marks. The department did not establish a prima facie case of smuggling beyond those marks, and there was no evidence of dubious conduct by the appellants. Their explanation of local purchase and accumulation of stock was not specifically rejected on merits. The marks of foreign origin could, at the highest, indicate foreign manufacture of some pieces, but did not justify an inference that all the goods were smuggled or that the burden had shifted to the appellants to prove lawful acquisition. The reasoning that mere suspicion or foreign markings alone proved smuggling was not accepted. On the penalty aspect, the finding that the appellants were persons concerned within the meaning of the penal provision could not stand once the smuggled character of the goods itself was not proved.

Conclusion: The confiscation and the penalties were unsustainable and were set aside in favour of the appellants.

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