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Appeal No(s).: C/75055 & 75056/2020-DB

(iii) Whether the burden of proof under Section 123 of the Customs Act, 1962, can be shifted to the appellants in the absence of any conclusive evidence proving the foreign origin of the gold, or not.

(iv) Whether the documents produced by the appellant no. 1 evidence licit purchase of the gold in question from domestic sources or not.

Issue No. (iii) Whether the burden of proof under Section 123 of the Customs Act, 1962, can be shifted to the appellants in the absence of any conclusive evidence proving the foreign origin of the gold, or not.

14. Section 123 of Customs Act, 1962, prescribes that the burden of proving that goods which have been seized under the Act are not smuggled in nature is on the person who claims the ownership of the goods. For the sake of ready reference, the said Section is extracted below: -

"SECTION 123. Burden of proof in certain cases. -- (1) Where any goods to which this section applies are seized under this Act in the reasonable Appeal No(s).: C/75055 & 75056/2020-DB belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be -

14.2. It is a fact that in the present case, the gold biscuits do not have clear foreign markings except for disputed markings on a few biscuits, and no further evidence was adduced to prove foreign origin. Hence, in the facts and circumstances of the case, we observe that the burden of proof under Section 123 of the Customs Act does not shift to the owner. The Customs authorities must first establish the foreign origin before invoking the presumption of smuggling. So, we find that the responsibility was on the Department to show that the gold in question was smuggled into the country without payment of appropriate duties of Customs thereon, which the Department has failed to discharge in this case.

14.5. Thus, we hold that the burden of proof under Section 123 of the Customs Act does not shift to the appellant no. 1, who has claimed the ownership of the gold in this case. Accordingly, we answer the issue framed at paragraph 11(iii) supra, in the negative.

Issue No. (iv): Whether the documents produced by the appellant no. 1 evidences licit purchase of the gold from domestic sources or not.

15. We observe that appellant no. 1 has produced evidence regarding legal purchase of the gold by means of three tax invoices dated 05.06.2016, 08.06.2015 and 11.06.2016. It is his submission that the appellant no. 2, namely, Shri Soibam Subhash Singh, was carrying the said invoices, but was unable to produce the same due to nervousness and/or fright. The said invoices are reproduced below for the sake of ready reference: -