Burden of proof in smuggling cases stays with the Department for non-notified goods unless lawful import evidence is disproved.

For goods not notified under Section 123 of the Customs Act, the initial burden to prove smuggled origin remains on the Department. That burden shifts only if the person concerned produces apparently credible evidence of lawful importation or legal acquisition and that evidence is found false or fictitious on enquiry. A mere assurance that another person will be produced does not transfer the burden, and restricted import status by itself does not establish smuggling because such goods may still be lawfully imported under licence. On that basis, confiscation was not sustainable.

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Issues: Whether, in respect of goods not notified under Section 123 of the Customs Act, 1962, the burden of proving smuggled origin remained on the Department and whether confiscation could be sustained without such proof.

Analysis: For goods not covered by Section 123, the initial burden to prove that the goods were smuggled lies on the Department. The burden shifts only where the person concerned produces evidence of lawful importation or legal acquisition and that evidence is found to be false or fictitious on enquiry. A mere statement that another person would be produced does not amount to an undertaking to prove lawful importation, nor does it transfer the burden to the person from whose possession the goods were seized. Restricted import status by itself does not establish smuggling, since such goods could still have been lawfully imported by persons holding the necessary licence.

Conclusion: The Department did not discharge the burden of proving that the goods were smuggled, and the burden did not shift to the appellant. The confiscation was not sustainable.

Final Conclusion: The appellate order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: In respect of goods not notified under Section 123 of the Customs Act, 1962, the burden of proving smuggled origin remains on the Department unless the person concerned first produces apparently credible evidence of lawful import or acquisition that is disproved on enquiry.

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