Confiscation of smuggled goods and their sale proceeds [Section 120-121]:

These two provisions specifically relate to smuggled goods like gold etc. where there is a change in their physical form or characteristics.

(a) Change in the physical form or characteristics of smuggled goods: Smuggled goods are liable to confiscation even if after smuggling there is a change in their physical form or characteristics.

For example, if smuggled gold idols are later on made into gold ornaments, they shall still be liable to confiscation.

(b) Smuggled goods mixed with other goods in inseparable manner: Where smuggled goods are mixed with other goods in such manner that the smuggled goods cannot be separated from such other goods, the whole of the goods shall be liable to confiscation.

However, where the owner of such goods proves that he had no knowledge or reason to believe that they included any smuggled goods, only such part of the goods the value of which is equal to the value of the smuggled goods shall be liable to confiscation.

(c) Confiscation of sale-proceeds of smuggled goods: Where any smuggled goods are sold by a person having knowledge/reason to believe that the goods are smuggled goods, the sale-proceeds thereof shall be liable to confiscation.