Proof of smuggled import is essential before confiscation, redemption fine, penalties, or customs duty can be sustained.

Confiscation, redemption fine, penalties and customs duty could not be sustained where the department failed to prove that the perforating machines were foreign-origin or smuggled goods. The alleged admissions in letters to the investigating bureau were disputed and did not amount to an acceptance of unlawful acquisition or liability to confiscation and penalty. A demand for declarations that no duty had been paid, that any payment was voluntary, and that no refund would be claimed could not replace proof of smuggled import. The DGTD letter was treated as inconclusive, so the statutory basis for confiscation, fine, penalties and duty demand failed.

---

---

Issues: Whether confiscation of the perforating machines, imposition of redemption fine and penalties, and the demand of customs duty could be sustained when the department had not proved foreign origin or smuggled nature of the goods and the alleged admission was disputed.

Analysis: The appellate authorities found that the letters written to the investigating bureau did not amount to an admission of unlawful acquisition or of liability to confiscation and penalty. The demand for a categorical declaration that no duty had been paid, that payment was voluntary, and that no refund claim would be made could not substitute for proof of smuggled import. The departmental reliance on the DGTD letter was held to be inconclusive, and the record did not establish that the machines were foreign goods or smuggled goods. In the absence of such proof, the statutory basis for confiscation, redemption fine, penalties, and customs duty did not survive.

Conclusion: The confiscation, redemption fine, penalties, and duty demand were not sustainable and the appeals were allowed with consequential relief.

---