9911796707
TMI Blog1976 (11) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Officers discovered the following lapses: (i) The R.G.I. register had not been written up for the period from 1-9-1973 to 21-9-1973. During this period, 92 Pumps had been manufactured by the appellants and the appellants had cleared 49 Pumps for home consumption and 80 Pumps for export from the factory. The relevant entries of production and clearance had not been made in the R.G.I. register; (ii) Out of the 92 Pumps manufactured during the period from 1-9-1973 to 21-9-73, 7 Pumps had been cleared and 85 Pumps were in stock. Further, out of the 7 Pumps cleared, two Pumps had been removed on gate passes but without debiting duty in their Personal Ledger Account; (iii) Six more Pumps had been cleared under 5 gate passes issued between 19-9-1973 to 21-9-1973, but the duty due thereon had not been debited in the Personal Ledger Account. The 85 pumps having not been accounted for in the R.G.I. register, were seized. The case was adjudged by the Collector under his above- mentioned order which is the subject matter of this appeal. 3. In the appeal, the appellants have not disputed the above facts. The essence of their submissions is as under : (i) There was no intention to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants manufactured the goods only against specific orders, there was no possibility of manufacture and removal of the goods without proper accounting. The relevant register maintained by the appellants was also shown to the Board. 5. As regards the appellants' failure to debit the duty in their Personal Ledger Account, it was argued that some kind of running account of the balance at their credit in the Personal Ledger Account and the debit of duty was being maintained on the reverse of the gate passes and these particulars were being transferred to the P.L.A. When it was pointed out that the gate passes on record did not show such account being maintained, it was stated that such account had been maintained on triplicate copies which were submitted to the Excise Officer in some other connection. Accepting that there was no doubt a default on the part of the appellants inasmuch as the duty had not been debited in the Personal Ledger Account as required under the law, Shri Banerjee argued that the failure could have been easily detected by themselves. It was also reiterated that the appellants had adequate credit balance in the Personal Ledger Account to cover the duty on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failures on the part of their staff. On the legal side, it has been submitted that in cases where no mens rea is involved, confiscation and penalty would be unwarranted. In this connection reference has been made to a number of judicial decisions. 9. Since the main argument is on the legal aspect, this has been considered in detail. The penal action has been taken under Rule 173Q of the Central Excise Rules. It was frankly admitted at the hearing that no judicial decision bearing on the question of penalty under this Rule could be cited. Reliance was, however, placed on certain decisions under the Sea Customs Act. The following judgments were cited in this connection - (1) Supreme Court Judgment in Ambalal v. Union of India (AIR 1961 SC 264); (2) Calcutta High Court Judgment in Manik Lal Sen and another v. Addl. Collector of Cusfoms, Calcutta. 10. Subsequently, Shri B.N. Banerjee drew the Boards's attention to what appears to be an unreported judgment of the Madhya Pradesh High Court in the case of Universal Cables Limited v. Union of India and others [1977 E.L.T. (J)] and also to a judgment of the Supreme Court cited in the above mentioned judgment Hindust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, was different from that involved here. The appellants apparently wish to place particular reliance on the following sentences in the judgment: "If the respondents had discharged the initial onus of showing that the goods had been illegally imported then they could confiscate the same. For purposes of penalty they would have to go further and show that the petitioner No 1 had been in possession of the said goods with the knowledge that they were smuggled." 15. It is apparently in this context that it has been contended while mens rea may not be a relevant consideration for taking action "IN REM", it was relevant for action "IN PERSONAM". But this observation also was made with reference to the type of cases considered in that judgment. 16. The Board finds that of the judgments cited by the learned Consulant, the one which comes closest to the facts of the present case is that in the case of Hindusran Steel v. State of Orissa. In this case Hindustan Steel had failed to register itself as a dealer for the purposes of the Orissa Sales Tax Act. It was held that the failure of the persons who were in charge of the affairs of the Company to register it as a dealer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce apply. The Board observes that under section 9-C of the Central Excises and Salt Act as amended in 1975 the existence of a culpable mental state is to be presumed in prosecutions under that Act. It could perhaps be argued that for offences under the Central Excises and Salt Act, there is a specific principle of criminal jurisprudence which throws on the accused person the burden of providing that he did not have a culpable mental state. The Board would not go so far as to draw such a conclusion, but confines itself to reiterating that the applicability of a judicial decision to any particular set of circumstances has to be considered with great care. 19. As already observed, the wording of Rule 173Q is unambiguous and by contrasting categories (a) to (c) with category (d), it could be inferred that a culpable mental state is not required for offences under categories (a) to (c). It may be that the framers of the Rule considered that the acts covered by these specific categories were ipso facto complete as offences where contraventions of other rules might or might not be with intent to evade duty, and therefore became complete offences only when that ingredient was proved ..... X X X X Extracts X X X X X X X X Extracts X X X X
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