Used for goods that by their nature, e.g. too dangerous or offensive in the eyes of the legislator (those are termed contraband in se) are forbidden, and for so-called derivative contraband, i.e. goods that may normally be owned but are liable to be seized because they were used in committing an unlawful act and hence begot illegally, such as:
stolen goods - knowingly participating in their trade is an offense in itself, called fencing.
the fruits of fraud, forgery etc.
The word is also used as an adjective, again meaning 'distributed or sold illicitly'.