1. Reasonable Belief and Burden of Proof: Under Section 110(1) of the Customs Act, seizure requires reasonable belief in the liability of goods for confiscation. The burden to establish this subjectively lies on the revenue. Where goods are seized from non-territory areas and handed over by another agency, the customs officer must form independent reasonable belief. Mere possession or suspicious markings without conclusive evidence of foreign origin do not satisfy this requirement. Consequently, the burden under Section 123 to prove the smuggled nature of goods does not shift to the owner unless the revenue first establishes prima facie foreign origin.
2. Insufficiency of Markings: Markings such as 'THOON' on gold articles, absent expert corroboration, assay reports, or specific notification linking them to foreign manufacturers, are hearsay and insufficient to prove foreign origin or smuggling. The presence of such markings alone cannot justify seizure or confiscation.
3. Licit Domestic Purchase: Valid tax invoices from reputable domestic entities, corroborated by seller confirmations and VAT compliance, establish a legal purchase. If the seized goods match the weight and description of legally purchased domestic goods, the claim of illicit acquisition fails.
4. Refund of Disposed Goods: Where customs authorities dispose of confiscated goods during the pendency of proceedings without due authority or jurisdiction, the appellant is entitled to a refund. Following recent judicial pronouncements like Dejero Logix Pvt. Ltd., the appropriate measure is not the declared value at seizure but the average market price prevailing on the date of disposal, as approved by the Joint Pricing Committee. This refund must be accompanied by interest at 12% per annum from the date of disposal till actual payment.
