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TMI Blog2015 (11) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia, provides that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or other rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under section 11A shall also be liable to pay a penalty equal to the duty so determined. All sale transactions conducted by the assessee in the year relevant to levy of tax in the State of Rajasthan were indicated in its books of accounts and also duly invoiced. There was no attempt to defraud the revenue by any concealment or misinformation. No finding of reckless/mala fide classification sought with regard to the goods sold has been arrived at. The dispute between the assessee and the Revenue was bona fide and related merely to the issue of classification and consequent rate of tax under the 2003 Act leviable on the sale of goods by the assessee, i.e., "Priyagold TM Toffito Mango Cream Toffee". The dispute was therefore a bona fide one as to the interpretation/ classification of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Commissioner (Appeals) in setting aside the levy of penalty under section 61 of the 2003 Act against the assessee. Hence this revision petition. The officer in-charge, present in the court in absence of the Department's advocate owing to advocates' strike, has submitted that payment of tax on goods sold claimed at the rate of four per cent. ad valorem by the assessee as against the tax due at the rate of 12.5 per cent. as found by the assessing officer, has been negated by the first appellate authority as also Tax Board and the sale of the goods in issue found to be exigible to tax at 12.5 per cent./14 per cent. ad valorem. According to him this indicates that the assessee had deliberately and intentionally short-paid the tax in an attempt at evasion. It has been submitted that consequently the pre-conditions for operation of section 61 of the 2003 Act were fulfilled and that the Deputy Commissioner (Appeals) and the Tax Board vide orders dated February 22, 2012 and September 19, 2013 have wrongly interfered with the levy of penalty by the assessing authority. It has been submitted that the very fact that the assessee was found liable to pay additional tax of 8.5 per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable on an assessee is finally found to be in excess of tax actually paid, penalty without anything more would be leviable. The Department thus propagates an open ended interpretation of the general words or any other manner in the later part of section 61 of the 2003 Act. However the principle of ejusdemgeneris would require the words in issue, i.e., or has avoided or evaded tax in any other manner to be interpreted in a limited manner with reference to the three conditions for the levy of penalty earlier detailed in section 61 of the 2003 Act prior to the general words. The principle of ejusdemgeneris mandates that where general words follow words which constitute a class by themselves, such general words have to be construed in a limited manner with reference to the specific words preceding them. For applicability of the principle of ejusdem generis reference to the judgment of honourable Supreme Court in the case of Siddeshwari Cotton Mills (P.) Ltd. v. Union of India [1989] 75 STC 75 (SC); [1989] 2 SCC 458 and Assis tant Collector of Central Excise v. Ramdev Tobacco Company [1991] 2 SCC 119 would suffice. In both the aforesaid judgments the honourable Supreme Court ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid are may direct that such dealer shall pay by way of penalty . May direct makes it evident that penalty under section 61 is discretionary in nature if the obtaining circumstances in which tax due was not paid satisfy the conditions set therein. In the case of Bharjatiya Steel Industries v. Commissioner, Sales Tax [2008] 13 VST 514 (SC); [2008] 11 SCC 617, the honourable Supreme Court has held that where discretion for levy of penalty is provided under a statute it follows mens-rea has to be found prior to the levy of penalty. Further in the case of Sree Krishna Electricals [2009] 23 VST 249 (SC); [2009] 11 SCC 687, the honourable Supreme Court observed that where certain items which are not included in the turnover are disclosed in the dealer's own account books and the assessing authorities include these items in the dealer's turnover disallowing the exemption penalty cannot be imposed . The purport of the aforesaid conclusion of the honourable Supreme Court is that where there is no deliberate attempt at concealment of tax and where the transaction in issue is disclosed in the account books of the assessee, sub sequent interpretation by the assessing authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has been conferred the discretionary jurisdiction to levy penalty it follows by necessary implication that it may not levy penalty if the circumstances of a case so warrant. It was further held that on the aforesaid proposition it followed that existence of mens-rea was a relevant factor for exercise of discretion by the statutory authority for the purpose of levying penalty-if the language of the governing statute so warranted. It is another matter that the honourable Supreme Court thereupon found that in the facts of the case before it existence of mens-rea on the part of the appellant-Bharjatiya Steel Industries was established. Where the ratio decidendi of a case has to be deduced, the relief granted or refused by the honourable apex court in the specific facts of a case before it is less relevant than the legal principle enunciated by the court. Penalty for non-payment or short-payment of excise duty can be levied under section 11AC of the Central Excise Act, 1944 (hereinafter the 1944 Act ). Section 11AC(1)(a) of the 1944 Act provides that penalty for shortlevy or non levy of duty in certain cases. It, inter alia, provides that where any duty of excise has not been le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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