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TMI Blog2019 (5) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... has been removed by way of omission of clause a of sub-rule (2) of Rule 3 of Export Of Service Rules, 2005. When the said condition has been omitted the only conditions to be satisfied for considering the service to qualify as export of service are in respect of the location of service recipient and the receipt of consideration in convertible foreign exchange . Admittedly in the present case the service recipient is located outside India and the payments toward considerations for providing the service are received in convertible foreign exchange. In our view the benefit of export of services cannot be denied to the Appellant from 27.02.2010 onwards till 30.06.2012 - From 01.07.2012 onwards the Place of Provision of Service Rules, 2012 were introduced. Rule 2 (f) of the said Rules define intermediary . Commissioner has in his order held that appellant was providing the intermediary services in relation to sale of goods by the associated group companies and hence by application of the rule 9 ibid, the place of provision of service is the location of service provider. While it is true that intermediary includes intermediary in respect of sale of goods, but legislature has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant or its employees by the overseas group associate companies. These charges are not reimbursement but payments towards the specific service provided by the overseas group associate company and are not reimbursements - Admittedly in present case the service provider the associated group companies are not having any office or presence in India. Thus the recipient of service has to pay the service tax on reverse charge basis. Whether the demand is hit by limitation as extended period of limitation as per Section 73 of The Finance Act, 1994 is not invokable in the present case? - HELD THAT:- The facts about the commission being received by the appellants from their overseas associate group companies for sale of their goods in India was never brought to the knowledge of department. Neither the commission received were reflected in the ST-3 return filed by the appellants. Though appellant had taken registration for providing business auxiliary services, and they do not dispute the fact that the services provided by them to the overseas associated group companies are appropriately classifiable under the said category they should have reflected the commission received from the overse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order in original No 46/ST-VII/RS/2014 dated 23.03.2015 of Commissioner Service Tax VII Mumbai. By the said order Commissioner has held as follows: 4.1 I confirm the demand of Service Tax of ₹ 1,32,57,559/- (Rupees One Crore Thirty Two Lakhs Fifty Seven Thousand Five Hundred and Fifty Nine only) and order its recovery from M/s Croda Chemicals (India) Private Limited under the provisions of Section 73(2) of the Finance Act, 1994 for the reasons discussed above. 4.2 I order recovery of interest at appropriate rate from the due date till the date of payment, on the amount of demand confirmed at Para 4.1 above, from M/s Croda Chemicals (India) Private Limited under the provisions of Section 75 of the Finance Act, 1994. 4.3 I impose a penalty of ₹ 1,32,57,559/- (Rupees One Crore Thirty Two Lakhs Fifty Seven Thousand Five Hundred and Fifty Nine only) on M/s Croda Chemicals (India) Private Limited under the provisions of Section 78 of the Finance Act, 1994. 4.4 I impose a penalty of ₹ 10,000/- (Rupees Ten Thousand only) under Section 77 of the Finance Act, 1994 on M/s Croda Chemicals (India) Privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of goods in domestic market. These services have been provided by them to their group companies abroad and are to be treated as export of services for the reason as follows: a. Period 01.04.2008 to 27.02.2010 Rule 3(1)(iii)/ Definition 3(2)(a)(b) Export of Service Rules, 2005 during this period for the Business Auxiliary Service to qualify as export of service, the service should have been provided to a person outside India and should have been used outside India. Also the payments should have been received in convertible foreign exchange. Since the services provided by them are admittedly Business Auxiliary Services against which the payments have been received in convertible foreign exchange, these services will qualify as export of services as has been held in following cases; GAP International [2015 (37) STR 757 (T-Del)] Microsoft Corporation (I) (P) Ltd [2014 (36) STR 766 (T-Del)] Paul Merchants Ltd [2013 (29) STR 257 (T-Del)] Samsung India Electronics P Ltd [2016 (42) STR 831 (T-Del)] IBM India (P) Ltd [2016 (55) GST 161 (T-Bang)] ABS India Ltd [2009 (13) STR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further held that amendments made to Section 67 by Finance Act, 2015, by adding explanation top the effect that consideration includes reimbursement is effective prospectively from 14.05.2015. Since entire period of demand is prior to that date, the demand made in respect of these reimbursements cannot be sustained. iii. Appellants are not liable to discharge service tax on the reimbursement of expenses made to overseas associate group companies as these services were rendered to them completely outside India and hence are non taxable in terms of Section 66A of the Finance Act, 1994. Since these amounts are nothing but reimbursements then even in case of reverse charge the taxable value is to be determined under Section 67 of Finance Act, 1994 and as per decision of Apex Court in case of Intercontinental Consultants, these charges which are in nature of reimbursements cannot be part of the taxable value. Further whatsoever charges Service Tax is paid by the appellants under the reverse charge mechanism is also available to them as CENVAT Credit and hence the situation is totally revenue neutral. iv. Extended period of limitation is not invokabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rality, it should be noted that in terms of CENVAT Credit scheme all the tax payments made under the Act are made Cenvatable to avoid the cascading effect. The general preposition that only because they are eligible to CENVAT Credit they are not required to pay tax is against the basic framework of law. vi. Extended period of Limitation is rightly invokable in the present case in view of the decisions in case of Reliant Advertising [2013 (31) STR 166 (T)], Vodafone Digilink [2011 (24) STR 562 (T-Del)] and Bharat Sanchar Nigam Ltd [2011-TIOL-552-CEST-Mum] 4.1 We have considered the impugned order, submissions made in the appeal and during the course of arguments. 4.2 Demand of Service tax in the present case has been made on three counts, i.e. i. The charges received by the appellants from their associated group of companies abroad for sale of their goods in India as Commission are leviable to service tax. (Service Tax demand ₹ 1,04,96,144/-) ii. The charges received by the appellant for recovery of expenses from associate group companies (Service Tax Demand ₹ 8,67,926/-) iii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r are export of services. 4.4.2 In the present case we are concerned with the period from 2008-09 to 2012-13. During the period under consideration, whether services provided are export of services or not needs to determined in terms of Export of Services Rules, 2005 as amended from time to time for period upto 30.06.2012 and for period thereafter in terms of Place of Provision of Services Rules, 2012. The relevant provisions of the Rule as they existed from time to time during the period of dispute are reproduced below: Export of Service Rules, 2005 (1) Export of taxable services shall, in relation to taxable services. (i) ; (ii) : Provided .;. (iii) specified in clause (105) of section 65 of the Act, but excluding. a. sub-clauses (zzzo) and (zzzv); b. those specified in clause (i) of this rule except when the provision of taxable services specified in sub-clauses (d),(zzzc),(zzzr) and (zzzzm) does not relate to immovable property; and c. those specified in clause (ii) of this rule, when provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commission received by the appellant is in respect of the sale of goods of associated group companies in India. It is not the case wherein the commission was paid in respect of the goods sold by the associated group companies elsewhere. It is the submission of the appellants that the services provided by them to their associated group companies for which they have received this commission is a performance based service. In para 3.2 of his order Commissioner has recorded as follows: 3.2 The Noticee have admitted that they are providing services of commission agent to their associated group companies which are located outside India. They have also admitted that the associated group companies do not have any business operations in India. They only have customers located in India. Therefore the marketing and promotion services provided by the Noticee are used by the sales of the product to the customers in India. Admittedly, Noticee have earned commission of ₹ 9,40,66,745/- from its associate group companies, located abroad for selling of goods manufactured by them, in Indian market during the period 2008-09 to 2012-13. The services of commission agent were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitting in India for a property located in U.K. and hands it over to the owner of such property having his business and residence in India, it would have to be presumed that service has been used outside India. Similarly, if an Indian event manager (a Category II service [Rule 3(1)(ii)]) arranges a seminar for an Indian company in U.K. the service has to be treated to have been used outside India because the place of performance is U.K. even though the benefit of such a seminar may flow back to the employees serving the company in India. For the services that fall under Category III [Rule 3(1)(iii)], the relevant factor is the location of the service receiver and not the place of performance. In this context, the phrase 'used outside India' is to be interpreted to mean that the benefit of the service should accrue outside India. Thus, for Category III services [Rule 3(1)(iii)], it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. In all the illustrations mentioned in the opening paragraph, what is accruing outside India is the benefit in terms of promot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective use and enjoyment of the service will of course depend on the nature of the service. For example effective use of advertising services shall be the place where the advertising material is disseminated to the audience though actually the benefit may finally accrue to the buyer who is located at another place. 4. This, however should not apply to services which are merely performed from India and where the accrual of benefit and their use outside India are not in conflict with each other. The relation between the parties may also be relevant in certain circumstances, for example in case of passive holding/ subsidiary companies or associated enterprises. In order to establish that the services have not been used outside India the facts available should inter-alia, clearly indicate that only the payment has been received from abroad and the service has been used in India. It has already been clarified that in case of call centers and similar businesses which serve the customers located outside India for their clients who are also located outside India, the service is used outside India. 5. Besides above, to attain the status of export, a numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The goods by the foreign entity by availing the services of service provider were to be consumed by the foreign entity in foreign land. Since these services were in relation to the procurement of goods and not in relation to marketing and sales promotion of the goods in India the case is clearly distinguishable. Microsoft Corporation (I) (P) Ltd [2014 (36) STR 766 (T-Del)] As per the para 3.2 of the order the consideration for the services provided is linked to the expenses incurred and is not linked to the invoice value as in the present case. Para 3.2 of the decision is reproduced below: 3.2 Consideration payable to appellant for providing aforesaid services was prescribed by clauses 6.1, 6.2, 6.3 and 6.4 of the agreement which reads as under : 6.1 Product Support Services and Consulting Services. For product support services and consulting services rendered pursuant to Article 2, MO shall pay Subsidiary an amount equal to one hundred and ten percent (110%) of Subsidiary s actual expenses, less revenues, incurred in connection with its duties, provided such expenses compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m time to time, provided, however, that any amount so invoiced shall be consistent with the arm s length standard (as defined in the OECD transfer pricing guidelines and relevant national legislation). The invoice shall contain a general description of the sales or services and the cost of the sales and/or services to be paid. From the reading of the said paras in the contract, the bench had observed in para 51 stating Even otherwise also, I find that the disputed service is the service being provided by the appellant to his principal located in Singapore. The marketing operations done by the appellant in India cannot be said to be at the behest of any Indian customer. The service being provided may or may not result in any sales of the product in Indian soil. From the facts as stated above it is quite evident that services provided by Microsoft India, were generalized service for sales promotion of the products of Microsoft Singapore in the territory assigned to them, whereas in the present case the commission is linked not to expenditure but the actual invoice value of sale. Thus this decision to is distinguishable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he clients abroad were desirous of confirming the fact as to whether the goods imported complied with requisite specifications and standards. Thus, client of the respondent located abroad engaged the services of the respondent for inspection and testing the goods. The goods were tested by the respondents in India. The goods were available or their samples were drawn for such testing and analysis in India. However, the report of such tests and analysis was sent abroad. The clients of the respondent were foreign clients, paid the respondent for such services rendered, in foreign convertible currency. It is in that sense that the Tribunal holds that the benefit of the services accrued to the foreign clients outside India. Since in this decision the service under consideration was in relation to goods under consideration for import by a foreign entity, the same is distinguishable. Simpra Agencies [2014 (36) STR 430 (T-Del)] The issue under consideration in the case was with respect to classification of services. After holding that services are classifiable as Business Auxiliary Services . Tribunal followed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified in sub-clauses (d), (zzzc), (zzzr) and (zzzzm) does not relate to immovable property. Thus, the classification appears to be of taxable service in relation to immovable property which is situated outside India and if it satisfies the conditions in the proviso below sub-rule (1) of Rule 3, then, there is stipulation in relation to taxable services referred to in several sub-clauses of clause (105) of Section 65 of the Finance Act, 1994 and specified in Rule 3(1)(ii). That is in relation to taxable services, specified in these sub-clauses of clause (105) of Section 65 of the Finance Act, 1994 which sub-clauses have been specified in Rule 3(1)(ii), as are performed outside India. However, in relation to that also if such taxable service is performed partly outside India it shall be considered to have been performed outside India. The further proviso below sub-rule (2) as it then stood stated that for the purpose of sub-rule (2) of Rule 3 of the Export of Services Rules, 2005 any taxable service provided shall be treated as export of service only if such service is delivered outside India and used in the business or any other purpose outside India and payment for such service pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02.2010 the benefit of export of services as claimed by the appellant in respect of commission received by them for sale of goods in India from associated group companies cannot be extended to them. 4.4.10 From 27.02.2010, the condition of use outside India has been removed by way of omission of clause a of sub-rule (2) of Rule 3 of Export Of Service Rules, 2005. When the said condition has been omitted the only conditions to be satisfied for considering the service to qualify as export of service are in respect of the location of service recipient and the receipt of consideration in convertible foreign exchange . Admittedly in the present case the service recipient is located outside India and the payments toward considerations for providing the service are received in convertible foreign exchange. In our view the benefit of export of services cannot be denied to the Appellant from 27.02.2010 onwards till 30.06.2012. 4.4.11 From 01.07.2012 onwards the Place of Provision of Service Rules, 2012 were introduced. Rule 2 (f) of the said Rules define intermediary . Commissioner has in his order held that appellant was providing the intermediary s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who arranges or facilitates a supply of goods, or a provision of service, or both, between two persons, without material alteration or further processing. Thus, an intermediary is involved with two supplies at any one time: i) The supply between the principal and the third party; and ii) The supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent, or a stockbroker) is excluded by definition. Thus while it is true that intermediary includes intermediary in respect of sale of goods, but legislature has while framing these rules deemed it fit to exclude the intermediaries in respect of sale of goods from the definition of intermediary. Hence we cannot sustain the view expressed by the Commissioner, contrary to the express definition of intermediary provided by the Place of Provision of Service Rules, 2012. Hence in our view the services provided by the appellant in respect of the sale of goods of associated group companies cannot be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d group abroad on actual basis for various activities undertaken by them and as detailed in table below: Nature of reimbursement Amount Rs Travel Expenses of the employees of overseas associate companies 9,61,505 Trade exhibition, ICMBA Conference, 9,95,690 Training expenses of the employee of overseas company 3,00,067 AMC Charges paid to M/s Ramco Systems Ltd on behalf of M/s PT Croda Indonesia 7,89,374 Salary cost of their seconded employees from respective overseas group companies to which they were seconded on quarterly basis 38,17,754 Detention and Demurrage Cost 1,48,173 Management Consultancy and Testing Services 6,01,833 Repacking Charges on purchase of goods, procurement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of taxable services for charging service tax, the authorities are to find what is the gross amount charged for providing such taxable services. As a fortiori, any other amount which is calculated not for providing such taxable service cannot a part of that valuation as that amount is not calculated for providing such taxable service . That according to us is the plain meaning which is to be attached to Section 67 (unamended, i.e., prior to May 1, 2006) or after its amendment, with effect from, May 1, 2006. Once this interpretation is to be given to Section 67, it hardly needs to be emphasized that Rule 5 of the Rules went much beyond the mandate of Section 67. We, therefore, find that High Court was right in interpreting Sections 66 and 67 to say that in the valuation of taxable service, the value of taxable service shall be the gross amount charged by the service provider for such service and the valuation of tax service cannot be anything more or less than the consideration paid as quid pro qua for rendering such a service. 25. This position did not change even in the amended Section 67 which was inserted on May 1, 2006. Subsection (4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that Section 67 is a declaratory provision, nor could it be argued so, as we find that this is a substantive change brought about with the amendment to Section 67 and, therefore, has to be prospective in nature. . 4.5.4 In view of the decision of Apex Court holding that Rule 5 is ultra vires the Section 67 of The Finance Act, 1994 during the material period and noting that Commissioner has not given any other reason for including these charges in value of taxable service, we hold that these charges cannot be added to the value of taxable services provided by the appellants. However we make it clear that since these charges cannot be added to value of taxable services provided, appellants could not have claimed any CENVAT Credit in respect of the input services received for providing these reimbursable services to their associate group companies. Subject to verification of the fact of non availment of CENVAT Credit in respect of these input services we agree with the contentions of the appellants in this respect. 4.6 Whether in respect of Foreign Exchange remittances made by the appellants to their associated group companies abroad for reimbur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The undisputed fact is that the issue was raised during the course of CERA audit conducted by the CAG on their records. Thus it is evident that the department was not aware till the date of audit the fact that the Noticee was earning commission but not assessing/paying the service tax on it. Statutory returns filed by the Noticee do not contain the details of commission earned by them. Therefore, the fact of misdeclaration and contravention of the provisions of law with intent to evade service tax is clearly established. The recovery mechanism provided in proviso clause to Section 73(1) of the Finance Act, 1994, as it existed at the material time, provides for demanding Service Tax short paid or not paid during the period up to five years, by reason of (a) fraud, or (b) collusion, or (c) wilful mis-statement, or (d) suppression of facts, or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of Service Tax. Thus, each of the sub-clauses getting covered by (a) to (e) of Section 73(1) are independent of eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar circumstances in following decisions invocation of extended period has been upheld: i. Tamilnadu Coop Textiles Processing Mills Ltd [2007 (207) ELT 593 (T)] 9. We have considered the decisions cited before us. In the case of Padmini Products (supra), it was held that, where there was scope for doubt as to whether the goods were dutiable or not, the extended period of limitation under the proviso to Section 11A(1) would not get attracted. In the present case, there was no scope for the Mills to doubt whether grey fabrics processed by them were handloom fabrics or powerloom fabrics. In TNHB s case, it was held that the assessee must be aware that duty was leviable and must be found to have deliberately avoided paying duty so that the extended period of limitation could be invoked for demanding the duty from them. This condition, in our view, stands satisfied in the present case. In the case of Chemphar Drugs Liniments (supra), it was held that conscious or deliberate withholding of information by manufacturer was necessary to invoke the larger period of limitation. The facts and circumstances of the present case, which have already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied to Co-optex during the period of dispute. ii. Rail Tel Corporation of India [2015 (40) S.T.R. 1131 (Tri. - Del.)] 6. We find that the appellant had registered itself under leased circuit service and as has been analysed above the impugned service rendered clearly and unambiguously fell under the scope of leased circuit service. Thus for the appellant who operates in this field and was even registered for leased circuit service, and therefore was not unaware thereof. Bona fide belief is not some sort of hallucinatory belief. It is a genuine belief of a reasonable person operating in an appropriate environment. Thus for such as assessee as the appellant, it could not have been a bona fide belief on its part that the service rendered did not fall under leased circuit service because there was no scope of any confusion or ambiguity in that regard. Further, the appellant did not timely provide the information sought and had to be issued repeated reminders. Therefore we are of the view that the appellant is guilty of suppression of fact and therefore the extended period has rightly been invoked and mandatory penalty is clearly impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue invokes the extended period of limitation under Section 11A the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful misstatement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. Since the facts in that case were known to both the parties Hon ble Apex Court held charge of suppression cannot be invoked. That is not the case here. In this case certain information which was available with the appellants was never disclosed to revenue, with the intention to evade payment of tax. This decision of Apex Court is clearly distinguishable. b. In case of Kingfisher Airlines Ltd. [2015 (40) STR 1159 (T-Mum)] Tribunal stated 26.1 So far the question of invocation of extended period is concerned, I find that there is no case of any suppression on the part of the appellant Airlines. The appellant Airlines have duly disclosed the receipts from passengers towards excess baggage in their books of account, maintained in the ordinary course of business. I find that the issue is one of interpretation of the taxing statute and as such being debatable, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 75 and penalties imposed under Section 77 and Section of Finance Act, 1994 can be sustained. 4.8.1 While adjudicating Commissioner has imposed penalties as under Section 77 and 78 of Finance Act, 1994. 4.8.2 Since we have held that extended period of limitation has been rightly invoked in the present case, the provisions of section 78 will get attracted automatically. In case of Rajasthan spinning and Weaving Mills Hon ble APEX Court has held as follows: 16. The other provision with which we are concerned in this case is Section 11AC relating to penalty. It is as follows : 11AC. Penalty for short-levy or non-levy of duty in certain cases.- 17. The main body of Section 11AC lays down the conditions and circumstances that would attract penalty and the various provisos enumerate the conditions, subject to which and the extent to which the penalty may be reduced. 18. One cannot fail to notice that both the proviso to subsection 1 of Section 11A and Section 11AC use the same expressions : ....by reasons of fraud, collusion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y involved in these appeals to a larger Bench doubting the correctness of the view expressed in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai Anr. [2007 (8) SCALE 304]. The question which arises for determination in all these appeals is whether Section 11AC of the Central Excise Act, 1944 (in short the Act ) inserted by Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum. Before the Division Bench, stand of the revenue was that said section should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and the adjudicating authority in such cases was duty bound to impose penalty equal to the duties so determined. The assessee on the other hand referred to Section 271(1)(c) of the Income Tax Act, 1961 (in short the IT Act ) taking the stand that Section 11AC of the Act is identically worded and in a given case it was open to the assessing officer not to impose any penalty. The Division Bench made refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the revenue, the assessee is exposed to penalty and the quantum of penalty is fixed. It is pointed out that even if in some statues mens rea is specifically provided for, so is the limit or imposition of penalty, that is the maximum fixed or the quantum has to be between two limits fixed. In the cases at hand, there is no variable and, therefore, no discretion. It is pointed out that prior to insertion of Section 11AC, Rule 173Q was in vogue in which no mens rea was provided for. It only stated which he knows or has reason to believe . The said clause referred to wilful action. According to learned counsel what was inferentially provided in some respects in Rule 173Q, now stands explicitly provided in Section 11AC. Where the outer limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be punishable with rigorous imprisonment for a term which may extend to one year or with fine. It is clear that in the former case what it intended is a civil obligation while in the latter what is imposed is a criminal sentence. There can be no dispute that having regard to the provisions of Section 276C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by Statute proceeds on the assumption that society suffers injury by and the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. In the case of a proceeding under Section 271(1)(a), however, it seems that the intention of the legislature is to emphasise the fact of loss of Revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection the terms in which the penalty falls to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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