Customs presumption under section 123 fails without valid seizure; smuggled nature must be proved by cogent evidence.

Where goods are not seized under section 110 of the Customs Act, the statutory presumption under section 123 does not arise, and the department must independently prove the smuggled character of the goods by cogent evidence. Mere certification of high purity or an unproved foreign-origin marking is insufficient to sustain confiscation or penalty. On the facts recorded, the evidence did not establish smuggling, so the confiscation and penalty were set aside and relief was granted to the appellant.

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Issues: Whether confiscation and penalty under the Customs Act could be sustained when the goods were not seized under section 110 and the department failed to prove smuggled nature, thereby preventing the presumption under section 123 from operating.

Analysis: The goods were not seized under the Customs Act, though proceedings under section 124 were initiated. Seizure under section 110 is essential for invoking the statutory presumption under section 123. In the absence of such seizure, the department was required to establish smuggled nature by cogent evidence. Mere high purity certified by the Mint, or an unexamined marking of foreign origin, was not sufficient to prove smuggling. The record did not disclose adequate cogent or circumstantial evidence to support confiscation.

Conclusion: The confiscation and penalty were not sustainable and were set aside in favour of the appellant.

Final Conclusion: Relief was granted to the appellant on the customs issue, and the impugned confiscation and penalty did not survive.

Ratio Decidendi: Where section 123 of the Customs Act is not attracted because seizure under section 110 has not been effected, the department must independently prove smuggled character of the goods, and confiscation cannot rest on mere suspicion or insufficient evidence.

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