WHICH serial numbers were "ground off". Remember, many mil-surp rifles have TWO serial number sets. The original numbers that are usually stamped or etched into the receiver (and often the bolt, mag well plate, barrel, and many other places, particularly on Eastern Bloc guns) and the IMPORTER serial number, listed under the importers name, and always on the ATF designated "receiver". So it is possible (and legal) to muck with the original serial numbers so long as the importer number is intact (some unscrupulous sellers try to force the original numbers to match, gleaning a few more coins from the unsuspecting collector). Also, anyone with a Type 03 FFL (so called "Curio and Relic" License) can receive C&R firearms at their home. Perhaps your seller got confused?

While you are probably correct that this was a "hot" gun dumped for cash, it is possible for this to be a legitament misunderstanding.