1986 (3) TMI 84 - HC - Central Excise

Summary

Issues Involved:
1. Violation of Central Excise Rules.
2. Requirement of mens rea (guilty mind) for penal action under Rule 173Q.
3. Ownership and liability concerning the confiscated goods.

Summary:

1. Violation of Central Excise Rules:
The writ petitioner, a public limited company owned by the State Government of Andhra Pradesh, was found transporting 176 sugar bags without valid transport documents as required u/r 52-A, 226, 173G, and 173F of the Central Excise Rules, 1944. The Superintendent of Central Excise (Audit) discovered this during an inspection on 24-4-1978. The company admitted to not having valid gate passes and not updating the personal ledger account (PLA) from 16-4-1978 to 24-4-1978. The Collector of Central Excise found the company guilty of these violations and imposed penalties and fines.

2. Requirement of mens rea for penal action under Rule 173Q:
The petitioner argued that the absence of a guilty mind should exempt them from penalties u/r 173Q. However, the court held that the Excise Rules create an absolute liability, and the presence of mens rea is not required for penal action. The court emphasized that excise revenue is crucial for public finance, and the rules must be enforced strictly to prevent tax evasion. The court cited various legal precedents and statutory interpretations to support this view, concluding that the manufacturer's knowledge and intent are presumed in such cases.

3. Ownership and liability concerning the confiscated goods:
The petitioner contended that the imposition of fines without giving an option to two cooperative bodies was contrary to Section 34 of the Central Excises and Salt Act. The court rejected this argument, noting that the goods were treated as belonging to the writ petitioner throughout the departmental inquiry. The cooperative societies did not complain or seek an opportunity to contest the fines, and thus the petitioner could not raise this issue on their behalf.

Conclusion:
The writ petition was dismissed with costs, and the court refused to certify the case for appeal to the Supreme Court, stating that it did not involve points of law fit for such a decision.