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Issues:
1. Confiscation of seized goods under Customs Act 2. Burden of proof in cases of seized goods 3. Application of Section 123 of the Customs Act 4. Evidence of smuggling and guilty knowledge 5. Contradictory statements by the respondent Confiscation of Seized Goods under Customs Act: The case involved the interception and seizure of goods of foreign origin from the respondent, who failed to produce any documentary evidence for legal possession or importation. The goods were seized under the belief of illegal importation, leading to a show cause notice for confiscation and penalty. The Adjudicating Authority found the respondent guilty, confiscating the goods with an option for redemption and imposing a penalty. The respondent appealed to the Collector of Customs (Appeals), who allowed the appeal, questioning the legality of the seizure. Burden of Proof in Cases of Seized Goods: The respondent argued that the burden of proving the seized goods were smuggled lay with the department, which failed to discharge it. The department contended that circumstances inferred the goods were smuggled, citing the respondent's contradictory statements as evidence of guilty knowledge. The legal presumption under Section 123 of the Customs Act was discussed, emphasizing the need for evidence to prove guilt. Application of Section 123 of the Customs Act: The Collector of Customs (Appeals) erred in not applying the provisions of Section 123 of the Customs Act, which lay down procedural rules. The timing of the seizure and subsequent adjudication was crucial in determining the applicability of Section 123. The judgment referenced a Supreme Court case to support the retrospective application of such provisions. Evidence of Smuggling and Guilty Knowledge: The evidence on record, even without the presumption under Section 123, established the respondent's guilt. The respondent's contradictory statements, lack of documentary evidence, and changing versions regarding ownership of the goods pointed towards guilt. The intercepted goods, lack of payment of duty, and respondent's conduct indicated smuggling. Contradictory Statements by the Respondent: The respondent's changing statements regarding ownership of the goods, from a German lady to another individual, were deemed unreliable by the Adjudicating Authority. The respondent's failure to provide substantial evidence, coupled with contradictory explanations, led to the conclusion that the goods belonged to the respondent. The respondent's arguments regarding lack of knowledge of smuggling were dismissed in light of the evidence. In conclusion, the appeal was allowed, setting aside the Collector of Customs (Appeals) decision and restoring the order-in-original passed by the Adjudicating Authority, confirming the confiscation of the seized goods and the penalty imposed on the respondent.
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