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TMI Blog2014 (1) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... f mens rea. As per Rule 173G(4)(a), every assessee to maintain such accounts, as the Commissioner may from time to time require of the production. Rule 53 deals with daily stock account and Rule 54 deals with monthly returns. Non-maintaining of accounts and non-accounting of the manufactured goods in the statutory records attracts the provision of Rule 173Q. Unless there is something in the language of the statute indicating the need to establish the element of mens rea, it is generally sufficient to show that a default to comply with the Rules has occurred attracting confiscation and penal provisions. There is nothing in Rule 173Q or Rule 209, which required that mens rea/intention need to be established - The Legislature used the conjunction “or” in Rule 173Q for Rule 173Q(1)(a) and Rule 173Q(1)(d), the Court cannot read into Rule 173Q(1)(b) that there should be the intention to evade payment of excise duty - mens rea of the appellant to remove the manufactured goods with intention to evade payment is not essential - appellant had not accounted for the manufactured goods and had not made entries in RG-1 Register. Non-accounting of manufactured goods in the statutory records fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/24.5.2001 and after affording opportunity to the appellant, the Commissioner of Central Excise passed the Order-in-Original No.52/MP/Commr/2004 dated 29.07.2004 ordering confiscation of the seized MS Ingots weighing 601.205 MT (7162 pieces) under Rule 173Q read with Rule 209 of Central Excise Rules, 1944. The Commissioner, however, gave an option to the appellant to redeem the confiscated quantity of MS Ingots on payment of redemption fine of Rs.10 lakhs. The Commissioner also imposed penalty of Rs.10 lakhs under Rule 173Q read with Rule 209 of Central Excise Rules. 4. Being aggrieved by the order of the Commissioner dated 29.07.2004, the appellant preferred appeal before the CESTAT. CESTAT observed that there no infirmity in the method arrived at the total excess of MS Ingots. Referring to the judgment of the Bombay High Court reported in 1988 (34) ELT 30 (Bom.) (Kirloskar Brothers Ltd. Vs. Union Of India), the Tribunal held that unaccounted goods found in the factory are liable for confiscation and found no infirmity in the order of the Commissioner whereby the Commissioner ordered for confiscation of the excess goods. However, taking into consideration the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, not incumbent upon the appellant to make entries in the RG-1 Register and thus, there was no violation of any rules authorizing respondents to levy penalty under Rule 173Q read with Rule 209. 8. Rule 173G deals with the procedure to be followed by the assessee. As per Rule 173G, every assessee to keep an account-current with the Commissioner separately for each excisable goods. As per Rule 173G(4), every assessee to maintain such accounts as the Commissioner may from time to time require. Rule 173G(4) reads as under:- 173G(4)(a) Every assessee shall maintain such accounts, as the Commissioner may from time to time require or [permit, subject to such conditions as may be specified by him] of the production, manufacture, storage, delivery or disposal of the goods, including the materials received for or consumed in the manufacture of excisable goods or other goods, the goods and materials in stock with him and duty determined and paid by him. 9. As pointed out earlier, Rule 53 mandates every manufacturer to maintain a stock account and Rule 54 to file monthly returns. Rules 53 and 54 read as follows:- 53.Daily stock account.- (1) Every manufacturer shall maintain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion undertaken by the Officers. Disputing the physical verification and also the mode of measurement, the appellant stated in the show cause dated 10.10.2001 as under:- ...In the face of huge variation found in respect of M.S.Ingots of general lengths and in view of the presence of 10 to 15% of the small lengths of M.S.Ingots the verification was not proper and valid. The Officers had taken the average of 1012 pcs. Of M.S.Ingots and applied the same to the number of ingots alleged to have found. We seriously disputed the physical verification undertaken by the officers and the result of such alleged verification was not proper and correct and on the basis of such verification no conclusion about the correct weight of the M.S.Ingots could be ascertained. .. By a careful reading of the above reply of the assessee, it appears that nowhere the appellant stated that the goods were not finished products and were not intended for marketing purposes and therefore, not required to be entered into RG-1 Register. The non-saleability of the goods being extended as a bona fide reason of non-entering the goods in RG-1 Register is totally baseless and unacceptable. 11. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- 173Q. Confiscation and penalty.- (1) If any manufacturer, producer, registered person of a warehouse or a registered dealer (a) removes any excisable goods in contravention of any of the provisions of these rules; or (b) does not account for any excisable goods manufactured, produced or stored by him; or (bb) xxxxxxxxxx (bbb) xxxxxxxxx (c) xxxxxxxxxxxx (d) contravenes any of the provisions of these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the manufacturer, producer, registered person of a warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (bb) or clause (bbb) or clause (c) or clause (d) has been committed or five thousand rupees, whichever is greater. Rule 209, which deals with confiscation and levy of penalty, is identical to that of Rule 173Q. 16. Sub-clause(a), (b), (d) in Rule 173Q are independent provisions. Expression used as a conjunction, or indicating that each of the clauses is independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscation and penalty arise under breach of duty provided in the Central Excise Act and Central Excise Rules, which creates strict liability without proof of mens rea. As per Rule 173G(4)(a), every assessee to maintain such accounts, as the Commissioner may from time to time require of the production. Rule 53 deals with daily stock account and Rule 54 deals with monthly returns. Non-maintaining of accounts and non-accounting of the manufactured goods in the statutory records attracts the provision of Rule 173Q confiscation and penalty. 19. Unless there is something in the language of the statute indicating the need to establish the element of mens rea, it is generally sufficient to show that a default to comply with the Rules has occurred attracting confiscation and penal provisions. There is nothing in Rule 173Q or Rule 209, which required that mens rea/intention need to be established. The Court cannot read anything into the statutory provisions or stipulated conditions, which are plain and unambiguous. The Legislature used the conjunction or in Rule 173Q for Rule 173Q(1)(a) and Rule 173Q(1)(d), the Court cannot read into Rule 173Q(1)(b) that there should be the intention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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