JUDGMENT : Ajay Kumar Mittal, J. 1. This is an appeal filed under Section 130 of the Customs Act, 1962 (in short 'the Act') read with Rule 29 of the CESTAT Procedure Rules, 1982, challenging the order dated 28.04.2017 passed by the Customs, Excise & Service Tax Appellate Tribunal (in short "CESTAT"), Kolkata in Appeal No. C/76318/2016-SM affirming the order of the Commissioner, Customs & Central Excise (Appeals), Guwahati [hereinafter referred as "Commissioner (Appeals)] dated 31.05.2016 whereby, the Order-in-Original passed by the Additional Commissioner of Customs (Preventive), Ministry of Finance, Department of Revenue, Office of the Commissioner of Customs (Preventive), North East Region, Shillong dated 17.12.2015 had been upheld. 2. Briefly, the facts as narrated in the appeal may be noticed. The appellant is the owner of a small shop located in close proximity to Srimantapur Land Customs Station, Sonamura, Tripura, which is located on Indo-Bangladesh border. On 27.09.2014, Customs Officers, Sonamura LCS along with BSF carried out a search operation in the shop of the appellant and seized Indian currency amounting to Rs.8,23,100/- and also Bangladesh Taka 3,32,335/- valued at Rs.2,32,635/-. According to the appellant, the Bangladesh Taka belonged to his cousin who is a Bangladeshi national and was on visit to India and staying in the house of the appellant during September 2014. The seizure was contested by the appellant before the Adjudicating Authority. The Additional Commissioner of Customs (Preventive) vide order dated 17.12.2015 passed under Sections 111(b), (d) and 121 of the Act read with Section 13 of FEMA, 1999 ordered confiscation and imposed penalty under Section 112(b)(i) of the Act. Accordingly, the Additional Commissioner of Customs (Preventive) ordered absolute confiscation of Bangladesh Currency Taka 3,32,335/- valued at Rs.2,32,635/- under Section 111(b) and (d) of the Act. Besides, confiscation of Indian Currency amounting to Rs.8,23,100/- was also seized under Section 121 of the Act, penalty of Rs.50,000/- was imposed on the appellant and Rs.25,000/- on the father-in-law of the appellant under Section 112(b)(i) of the Act. 3. Being aggrieved, the appellant filed an appeal before the Commissioner (Appeals) which was rejected vide order dated 31.05.2016 (Annexure-H). Further the Tribunal upheld the Order-in-Original and the order of Commissioner (Appeals) dismissing the appeal of the appellant on 28.04.2017 (Annexure-J). 4. 3. Being aggrieved, the appellant filed an appeal before the Commissioner (Appeals) which was rejected vide order dated 31.05.2016 (Annexure-H). Further the Tribunal upheld the Order-in-Original and the order of Commissioner (Appeals) dismissing the appeal of the appellant on 28.04.2017 (Annexure-J). 4. The appellant claimed that the appeal raised the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, learned Tribunal has committed substantial error of law, while approving the Order of confiscation of Indian currency Rs.8,23,100/- under Section 121 of the Customs Act, 1962, passed by the Additional Commissioner of Customs (Preventive) N.E.R., Shillong without any cogent evidence against the appellant. Said Indian currency was seized on a reasonable belief of same being the sale proceeds of smuggled goods. However, no evidence adduced to show that the seized sum related to any Sale Proceeds of smuggled goods and the appellant was having knowledge of the same. Moreover, it is evident from record that the Section 123 of the Customs Act, 1962, was not invoked; therefore burden to prove allegation squarely lies on the department, which has not been discharged. (ii) Whether confiscation of Bangladesh taka 3,32,335/- is sustainable under Section 111(b) and (d) of the Customs Act, 1962, when same was permitted to be imported in valid entry into India from a foreign country (Bangladesh) without declaration to the customs or any other authority. In terms of the Reserve Bank Exchange Control Notification No. F.E.R.A. 81/89-RB dated 09.08.1989, as amended, read with Notification No. F1/107/EC 73 : dated 01.01.1974, issued by Government of India, Ministry of Finance made it mandatory for declaration above US Dollar 10,000.00 or equivalent value only. Moreover, foreign currency is not covered under section 123 of the Customs Act 1962 (burden of proof). 5. The appeal came up for hearing before the Division Bench of this Court on 23.06.2017. It was held that in so far as the seizure of Bengladesh Currency Taka amounting to 3,32,335/- valued at Rs.2,32,635/- is concerned, confiscation did not raise any substantial question of law. 5. The appeal came up for hearing before the Division Bench of this Court on 23.06.2017. It was held that in so far as the seizure of Bengladesh Currency Taka amounting to 3,32,335/- valued at Rs.2,32,635/- is concerned, confiscation did not raise any substantial question of law. However, the appeal was admitted to answer the following substantial question of law which reads thus; "Whether on the facts and in the circumstances of the present case, the Tribunal has proceeded on irrelevant considerations and has erred in passing the impugned order dated 28.04.2017 and in approving the order-in-appeal dated 31.05.2016 and order-in-original dated 07.12.2015 without examining the entire record?" 6. The appeal finally came up for hearing on 23.02.2018 and the then Division Bench after noticing the substantial question of law, dismissed the appeal. However, on a review petition filed by the appellant, the order was re-called vide order dated 15.10.2018 and the present custom appeal was restored to its original number for decision on the substantial question of law framed on 23.06.2017. It is in this background that the present appeal is listed before us today. 7. We have heard learned counsel for the parties. 8. Learned counsel for the appellant, inter alia, submitted that the appellant had taken a loan of Rs.5,50,000/- in cash on 08.02.2012 from his father-in-law Shri Sunil Kumar Roy for expansion of his stationery business. The seized money was partly for the re-payment of the said loan. It was then urged that the amount which was an Indian currency belonged to the appellant and was his accounted for money. To substantiate the claim, learned counsel referred to the statement of the appellant recorded by the Superintendent Custom Preventive Force Sonamura Sepahijala on 29.09.2014. 9. It was contended that in the statement recorded on 29.09.2014 relating to Indian Currency of Rs.8,23,100/-, there was no admission by the appellant that it was illicit and resulted from dealings in Bangladesh Currency. However, with regard to seizure of Bangladesh Currency Taka 3,32,335/- valued at Rs.2,32,635/- is concerned, the statement recorded by the Department on that day was as per the dictation of the authorities. The investigating authorities had compelled the appellant to subscribe the statement to the questions, therefore, the appellant who is not well conversant with the English language did not understand what he was subscribing to and therefore, he detracted his statement. The investigating authorities had compelled the appellant to subscribe the statement to the questions, therefore, the appellant who is not well conversant with the English language did not understand what he was subscribing to and therefore, he detracted his statement. Reference was also made to the statement of Shri Sunil Kumar Roy, the father-in-law of the appellant. 10. According to the learned counsel, the Tribunal without consideration of the aforesaid facts and in a mechanical manner had upheld the order of the Adjudicating Authority and the Appellate Authority. Alternatively, it was urged that the appellant had even discharged the initial onus placed upon him under Section 123 of the Act by producing prima facie material and the Tribunal had erred in deciding the issue against the appellant. 11. It would be expedient to refer to Sections 121 and 123 of the Act which would be material for adjudication of the present appeal. Section 121 of the Act reads thus; "Confiscation of sale-proceeds of smuggled goods. Where any smuggled goods are sold by a person having knowledge or reason to believe that the goods are smuggled goods, the sale-proceeds thereof shall be liable to confiscation." On plain reading, it is discernible that the pre-condition required to be satisfied for applicability of Section 121 of the Act, namely, is that the sale proceeds to be confiscated was a result of smuggling of goods and that the sale was made by the person having knowledge that the goods were smuggled goods. 12. Scope of Section 123 of the Act needs to be examined which deals with burden of proof. The provision reads thus; "Burden of proof in certain cases.- (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be- (a) in a case where such seizure is made from the possession of any person,- (i) on the person from whose possession the goods were seized; and (ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; (b) in any other case, on the person, if any, who claims to be the owner of the goods so seized. (2) This section shall apply to goods and manufacturers thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette, specify." 13. On perusal of Sub-section (1), it is explicit that when any goods to which the Section applies are seized under the Act under a reasonable belief that they were smuggled goods, the burden of establishing that they were not smuggled goods, shall lie upon the person from whose possession the goods were seized. Sub-section (2) has applicability in so far as gold and manufacturers thereof are concerned and to watches as well. However, the Central Government has been empowered to extend its applicability to any other class of goods by issuance of notification in the official Gazette in that behalf. 14. The Indian currency seized in the present case falls outside the ambit of section 123 of the Act not being a notified item. However, by virtue of Section 121 of the Act, it is still liable to be confiscated provided it is as a result of sale proceeds of smuggled goods. In such a situation, the presumption contained in Section 123 of the Act would not be available to the Revenue which can be relied upon. Even though the provisions of the Evidence Act, 1872 (In short, the 1872 Act) are not applicable to proceedings under the Act, yet the broad principles and rule of evidence contained in Section 101 of the 1872 Act regarding 'Burden of proof would place the initial burden on the Department to establish by producing material evidence that the Indian currency or the asset sought to be confiscated was a result of sale proceeds of smuggled goods. In other words, as per law governing onus to prove, it would lie on the Revenue to establish by producing cogent, material and convincing evidence that the Indian currency in possession of a person is on account of sale proceeds of smuggled goods and thus, liable to confiscation under Section 121 of the Act. 15. The question that requires determination in this appeal is whether the appellant from whose possession Indian Currency amounting to Rs.8,23,100/- was seized was as a result of sale proceeds of smuggled goods. 16. 15. The question that requires determination in this appeal is whether the appellant from whose possession Indian Currency amounting to Rs.8,23,100/- was seized was as a result of sale proceeds of smuggled goods. 16. It was incumbent upon the Revenue to have proved that the possession of Indian currency amounting to Rs.8,23,100/- with the appellant was as a result of sale proceeds of smuggled goods. The Department has sought to proceed on the assumption that ordinarily, when Bangladeshi Taka 3,32,335/- valued at Rs.2,32,635/- was seized from the appellant, a normal inference would be to presume that the possession of Indian currency of Rs.8,23,100/- was as a result of sale proceeds of some smuggled goods or on account of dealings in Bangladeshi currency. 17. However, the law nowhere envisages or raises any presumption in favour of the Department. The Revenue was required to produce material to have a reasonable belief that the Indian currency was on account of sale proceeds of smuggled goods. The Revenue respondent has not placed any material to substantiate that the seized amount of Rs.8,23,100/- was on account of sale proceeds of any smuggled goods except to plead that inference ought to have been drawn against the appellant as there was admission on his part. The burden on the Revenue was required to be discharged by cogent material/evidence. 18. We now proceed to examine the evidence produced by the appellant. The appellant had drawn the attention of the Court to his statement recorded by the Superintendent Custom Preventive Force Sonamura Sepahijala on 29.09.2014 wherein, in questions No. 13 and 14 it was stated as under; "13. ...As regards Indian Currency, I also do not have any licit documents but I was the actual owner of the same which were for my existing business. 14. ...Seized Indian Currency of Rs.8,23,100/- which were recovered from my shop is no way related to suggested Bangladesh currency illegally imported. I opened M/s. Mousumi Varieties for carrying on trade/Business in groceries, stationery, gift items under License No. 10147 dated 1/8/12 issued by Sonamura Nagar Panchayat read with Registration Certificate No. SNM/18435 dated 09/07/2012 issued by the Registration Authority. During that period I took loan Rs.5,50,000 from my father in law Sri Sunil Kumar Roy son of (L) Ramoni Mohan Roy, Hospital Road Ward No. 11, Sonamura, a retired Govt. Servant of Central Water Commissions for my business purpose. During that period I took loan Rs.5,50,000 from my father in law Sri Sunil Kumar Roy son of (L) Ramoni Mohan Roy, Hospital Road Ward No. 11, Sonamura, a retired Govt. Servant of Central Water Commissions for my business purpose. Condition was that I am to repay the loan amount within 3 years. Accordingly, I started saving from my business for repaying the same. The rest payment towards furniture/gift items and to pay sometimes weekly/fortnight/monthly to the plastic shops namely (1) National Goolbazar Agartala. (2) J.C. Group deals in plastic Agartala. (3) Super Star in Agartala. Balance amount was for my day to day livelihood expenditure." 19. Further statement of Shri Sunil Kumar Roy, father-in-law of the appellant recorded on 07.10.2014 was also relied wherein, he had submitted as under; "13. It is very much true, I gave him loan of Rs.5,50,000/- for his business after withdrawing from my SBI Account No. 11816980059 for which I withdrawn the said amount on 08.02.2012 (Documents submitted in Xerox form)." 20. The Xerox copy of the statement of the account of the father-in-law, Shri Sunil Kumar Roy had been produced which shows cash withdrawal of Rs.5,50,000/- on 08.02.2012 which is appended as Annexure-C to the appeal. 21. The adjudicating authority, the appellate authority and the Tribunal had based their decision by holding that the appellant had admitted before the adjudicating authority that the amount of Rs.8,23,100/- was on account of sale proceeds of smuggled goods. It is noteworthy, the appellant in his statement had repeatedly and specifically stated that he had taken a loan to the tune of Rs.5,50,000/- from his father-in-law and a part of the money found in his possession was for the purpose of re-payment of the said loan. The father-in-law of the appellant was also interrogated who duly corroborated the statement of the appellant. It is difficult to find from the record that the appellant had admitted that the Indian Currency of Rs.8,23,100/- had been the sale proceeds of "smuggled goods" and thus, no finding to that effect can be returned even on inference. 22. In the present case, the appellant from whose possession cash of Rs.8,23,100/- was seized had by preponderance of evidence shown that partly the amount was for the purpose of discharging the loan which was taken by him from his father-in-law. 23. 22. In the present case, the appellant from whose possession cash of Rs.8,23,100/- was seized had by preponderance of evidence shown that partly the amount was for the purpose of discharging the loan which was taken by him from his father-in-law. 23. In the absence of any material to substantiate the allegation of the Revenue, the Additional Commissioner of Customs (Preventive), the Commissioner (Appeals) and the CESTAT were not justified in upholding the order of confiscation of the amount of Rs.8,23,100/- and imposition of the penalty in respect thereof. 24. In view of the above, the substantial question of law referred to and reproduced in para 5 is answered in favour of the appellant and against the Revenue relating to seizure of Indian Currency of Rs.8,23,100/-. The appeal stands disposed of accordingly.