Confiscation of seized currency failed where the Department could not prove it was sale proceeds of smuggled goods.

Indian currency seized from the appellant was not shown to be sale proceeds of smuggled goods, so confiscation under Section 121 of the Customs Act could not be sustained. The Department failed to prove the essential statutory requirements: that the money was derived from the sale of smuggled goods and that the sale was made by a person knowing or having reason to believe the goods were smuggled. Mere seizure of currency on information, together with seizure of gold, was insufficient to meet that burden, so confiscation was held unsustainable.

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Issues: Whether the Indian currency seized from the appellant was liable to confiscation under Section 121 of the Customs Act, 1962 as the sale proceeds of smuggled goods.

Analysis: The material on record did not establish that the currency represented the sale proceeds of smuggled goods. The essential ingredients of Section 121, namely proof that the money was derived from the sale of smuggled goods and that such sale was made by a person knowing or having reason to believe that the goods were smuggled, were not shown by the Department. Mere seizure of currency on information and seizure of gold from the appellant was held insufficient to discharge that burden.

Conclusion: Confiscation of the Indian currency was not sustainable and the appellant succeeded on this issue.

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