Burden of proof in smuggled goods cases lies on Customs absent statutory presumption, defeating confiscation and penalty.

Where goods are not covered by the statutory presumption under Section 123 of the Customs Act, 1962, Customs must prove their foreign origin and smuggled character before confiscation or penalty can stand. On the facts, antimony ingots were not shown to be illegally imported: antimony was a free import under the applicable policy, and the evidence on purity, market availability and source of purchase did not conclusively establish smuggling. The assessee's purchase records and explanation were not effectively rebutted, so the Department failed to discharge the burden of proof. Confiscation and penalty were therefore not sustainable.

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Issues: Whether the seized antimony ingots were proved to be smuggled or illegally imported goods so as to warrant confiscation and penalty.

Analysis: The goods were not shown to be covered by the statutory presumption under Section 123 of the Customs Act, 1962. The Customs Department was therefore required to establish the foreign origin and smuggled character of the goods. The record showed that antimony was a free import under the applicable import policy, and the evidence regarding purity, local market availability, and source of purchase did not conclusively establish illegal import. The appellant's purchase records and explanation were not effectively rebutted, and the Department did not discharge its burden of proof to the requisite standard.

Conclusion: The seized antimony ingots were not proved to be smuggled goods, and confiscation and penalty were not sustainable; the finding is in favour of the assessee.

Ratio Decidendi: Where goods are not notified under Section 123 of the Customs Act, 1962, the burden rests on the Customs authorities to prove smuggled import, and in the absence of such proof confiscation and penalty cannot be sustained.

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