2001 (2) TMI 184 - AT - Central Excise

Summary

Issues:
Classification list requirement for fully exempted goods, imposition of penalty under Rule 173Q, interpretation of mens-rea in penalty proceedings.

Classification List Requirement:
The appellant, a manufacturer of 'Micro Cellular Rubber,' fully exempt from duty, was asked to file a classification list despite the goods being exempt. The Assistant Collector imposed a penalty for not filing the list, citing a violation of rule 173B. The Commissioner (Appeals) reduced the penalty, but the appellant appealed.

Imposition of Penalty under Rule 173Q:
The Tribunal noted that mens-rea may not be necessary for liability under Rule 173Q. However, in this case, where there was no revenue loss and the appellant acted in good faith, the Tribunal found no justification for the penalty. The Tribunal emphasized that penalties in such cases should be quasi-criminal and imposed only for deliberate defiance of law or dishonest conduct, which was not present here.

Interpretation of Mens-Rea in Penalty Proceedings:
The Tribunal referred to a Supreme Court case regarding the interpretation of mens-rea in penalty proceedings under a different statute. They concluded that mens-rea may not be required for liability under Rule 173Q. Despite this, the Tribunal found that in the absence of deliberate defiance or dishonest conduct, no penalty should be imposed. They set aside the penalty and allowed the appeal, stating that the essential elements for imposing a penalty were not present in this case.