9911796707
TMI Blog2024 (5) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... AC of the Central Excise Act, 1944. In the present case, the record shows that all the goods were accounted for, since the invoices with regard to the raw material and finished goods were there on record - Tribunal has totally ignored the documents produced before the Commissioner Appeals. As per Section 11AC of the Act, 1944, there should be an intention to evade the payment of duty and in the present case intention to evade the payment of duty is not proved by the authorities while passing the order of penalty - A perusal of the record shows that there was no intention to evade duty, which is requisite of Section 11AC of the Act. And Rule 25 of the Rules 2002 is not an independent rule and cannot be invoked unless it covers the ingredients to impose penalty as imposed in Section 11AC of the Act. So far as Rule 25 is concerned, it starts as subject to the provisions of Section 11AC of the Act which shows that Rule 25 would be applicable only in cases where Section 11AC is invoked. The impugned order is set aside - appeal allowed. - HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON BLE MRS. JUSTICE SUDEEPTI SHARMA Mr. Deepak Gupta , Advocate for the appellant Mr. Ajay Kalra , Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted. In support of his contentions, he has relied upon a judgment of this Court in the case of Commissioner of Central Exicse Vs. Sadashiv Ispat Ltd. [2010 SCC Online P H 1237] wherein it has been held as under:- 8. A perusal of the impugned order shows that no evidence has been produced by the Revenue that the respondent had cleared the goods unaccounted and the goods were kept for clandestine clearance. In the present case, even if the goods had not been entered in the RG-1 register, yet the same cannot lead to the conclusion that the goods were meant for clandestine removal. Both the Commissioner as well as the Tribunal have returned a concurrent finding of fact that there was no mens rea on part of the respondent to clandestinely remove the goods. * * * * 12. In the present case, the Department has failed to prove the element of mens rea for imposition of penalty. It has been so held by the Commissioner as well as the Tribunal that no case was made out to impose penalty. The finding recorded that no case was made out for imposition of penalty is not shown in any manner to be perverse. 13. In view of the above, we find no merit in this appeal and the same is accordingly dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : * * * Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty as reduced or increased, as the case may be, shall be taken into account: (emphasis supplied) 21. From a perusal of the aforesaid section, especially the underlined portion, it is clear that in order to attract the penalty provision under Section 11-AC, criminal intent or mens rea is a necessary constituent. In the reply to the show- cause notice the stand which has been taken by the respondent is that it has been paying the duty and there is no mala fide intention on its part to evade the payment of duty. The further stand is that the goods were cleared from the factory only on payment of duty. This stand which has been taken in the reply to the show-cause notices was not found to be incorrect in the order-in-original. As such the imposition of penalty of the equal amount of duty under the order-in-original cannot be sustained. 22. It is well settled that when the statutes create an offence and an ingredient of the offence is a deliberate attempt to evade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase tax under the provisions of sub-section (1) or (2) of section 16, then, the Commissioner may impose on him, in addition to any tax payable - (a) if he has included the purchase price of the goods in his turnover of purchase as required by subsection (1) of section 16, a sum by way of penalty not exceeding half the amount of tax, and (b) if he has not so included the purchase price as aforesaid, a sum by way of penalty not exceeding twice the amount of tax. (2) If it appears to the Commissioner that such dealer - (a) has failed to apply for registration as required by section 29, or (b) has without reasonable cause, failed to comply with the notice under section (41, 44 or 67] (c) has concealed the particulars of any transaction or deliberately furnished inaccurate particulars of any transaction liable to tax, the Commissioner may impose upon the dealer by way of penalty, in addition to any tax assessed under section 41 or reassessed under section 44 or revised under section 67 a sum not exceeding one and one-half times the amount of the tax. (3) If a dealer fails to present his licence, recognition or as the case may be, permit for cancellation as required by section 35 or 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period commencing from the date of expiry of the time prescribed for payment of tax under sub-section (1), (2) or (3) and ending on date of order of assessment, reassessment or, as the case may be, revision, simple interest at the rate of [eighteen per cent] per annum on the amount of tax not so paid or on any less amount thereof remaining unpaid during such period. 6.2 On a fair reading of Section 45 of the Act, it can be seen that as per sub-section (2) of Section 45 of the Act, 1969, penalty is leviable if it appears to the Commissioner that a dealer has concealed the particulars of any transaction or deliberately furnished inaccurate particulars of any transaction liable to tax. In the present case, it cannot be said that the dealer has concealed the particulars of any transaction or deliberately furnished inaccurate particulars of any transaction liable to tax. However, in so far as penalty leviable under sub-section (6) of Section 45 of the Act, 1969 is concerned, the penalty leviable under the said provision is as such, a statutory penalty and there is no discretion vested with the Commissioner as to whether to levy the penalty leviable under sub-section (6) of Section 45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment that the penalty be levied on the difference of amount of tax paid and amount of tax payable as per the order of assessment or re-assessment as the case may and the same shall be automatic. Therefore, when the penalty on the difference of amount of tax paid and tax payable is more than 25% of the amount of tax so paid, there shall be automatic levy of penalty under Section 45(6) of the Act. 6.4 From the language of Section 45(6) of the Act, it can be seen that the penalty leviable under the said provision is a statutory penalty. The phrase used is shall be levied. The moment it is found that a dealer is deemed to have failed to pay the tax to the extent mentioned in sub-section (5) of Section 45, there shall be levied on such dealer a penalty not exceeding one and one-half times the difference referred to in sub-section (5). As per sub-section (5), where in the case of a dealer the amount of tax assessed or re-assessed exceeds the amount of tax already paid by the dealer in respect of such period by more than 25% of the amount of tax so paid, the dealer shall be deemed to have failed to pay the tax to the extent of the difference between the amount so assessed or re- asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was in question in the said case imposed a punishment of imprisonment up to six months and fine for the offences under the Act. The said case has no application in the present case which relates to imposition of civil liabilities under the SEBI Act and the Regulations and is not a criminal/quasi-criminal proceeding. 35. In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulations is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention was made by the defaulter with guilty intention or not. We also further hold that unless the language of the statute indicates the need to establish the presence of mens rea, it is wholly unnecessary to ascertain whether such a violation was intentional or not. On a careful perusal of section 15D(b) and section 15E of the Act, there is nothing which requires that mens rea must be proved befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to what has been said as also to what has not been said. The courts cannot aid the legislatures' defective phrasing of an Act; they cannot add or mend, and by construction make up deficiencies which are left there. 6.12 Under the circumstances, on strict interpretation of Section 45 and Section 47 of the Act, 1969, the only conclusion would be that the penalty and interest leviable under Section 45 and 47(4A) of the Act, 1969 are statutory and mandatory and there is no discretion vested in the Commissioner/Assessing Officer to levy or not to levy the penalty and interest other than as mentioned in Section 45(6) and Section 47 of the Act, 1969. It is needless to observe that such an interpretation has been made having regard to the tenor of Sections 45 and 47 of the Act, 1969 and the language used therein. 6.13 In so far as the decisions relied upon by the learned counsel appearing on behalf of the respondent-assessee-dealer, referred to hereinabove, are concerned, none of the decisions shall be applicable to the facts of the case at hand, while dealing with Section 45 and Section 47 of the Act, 1969. The words/language of the relevant provisions that fell for consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay by the officers of DGCEI without proper Inventory is clearly not substantiated. It is on record that the goods have been seized and the records have been seized as per enclosures attached to panchnama and every page of the panchnama including enclosures stands signed by the Independent witnesses. Further, surprisingly, I find the appellants who claimed that the RG-1 has been taken away by DGCEI have produced copies of RG-1 register along with reply to the show cause notice. From the above, it is clear that the respondents have clearly failed in maintaining the proper records relating to the raw materials received by them and Issued by them as well records of finished goods as manufactured by them and cleared by them at least for the period 01.08.2003 to 23.08.2003 i.e. till date of the visit of the officers. Under these circumstances, the goods seized were liable for confiscation. Therefore, the order of the Commissioner (Appeals) in setting aside the confiscation cannot be allowed to survive and the same is set aside. For irregular maintenance of records, the respondents are also liable to penalty. 9. However, as submitted by the Id. Advocate, the original authority has clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has totally ignored the documents produced before the Commissioner Appeals. 14. For proper adjudication of the case in hand relevant provisions of The Central Excise Act, 1944 and Central Excise Rules, 2002, are being reproduced hereunder:- 11AC Penalty for short-levy or non-levy of duty in certain cases:- (1) The amount of penalty for non-levy or short-levy or non-payment or short-payment or erroneous refund shall be as follows:- (a) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, for any reason other than the reason of fraud or collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (10) of Section 11A shall also be liable to pay a penalty not exceeding ten per cent, of the duty so determined or rupees five thousand, whichever is higher. Provided that where such duty and interest payable under section 11AA is paid either before the issue of show cause notice or within thirty days of issue of show cause notice, no penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by such person shall be twenty-five per cent. Of the duty so determined, subject to the condition that such reduced penalty is also paid within the period so specified. (2) Where the appellate authority or tribunal or court modifies the amount of duty of excise determined by the Central Excise Officer under sub-section (10) of section 11A, then, the amount of penalty payable under clause (c) of sub- section (1) and the interest payable under section 11AA shall stand modified accordingly and after taking into account the amount of duty of excise so modified, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay such amount of penalty and interest so modified. (3) Where the amount of duty or penalty is increased by the appellate authority or tribunal or court over the amount determined under subsection (10) of section 11A by the Central Excise Officer, the time within which the interest and the reduced penalty is payable under clause (b) or clause (e) of sub-section (1) in relation to such increased amount of duty shall be counted from the date of the order of the appellate authority or tribunal or court. RULE 25. Conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
