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TMI Blog2024 (5) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... der impugned, warranting intervention by this Court - appeal dismissed. - HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA AND HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: For the Appellant : Ms. Nikita Garg, Advocate. For the Respondents : Mr. Sourabh Goel, Sr. Panel counsel with Ms. Shivani Sharma and Ms. Geetika Sharma, Advocate. SUDEEPTI SHARMA, J 1. Present appeal is filed under Section 35-G of the Central Excise Act, 1944 (hereinafter to be referred as the Act ) against order dated 16.08.2005 (Annexure P. 24) passed by the Commissioner (Appeals) and order dated 22.10.2007 (Annexure P. 25) passed by the Tribunal. 2. Brief facts of the case are that appellant is engaged in the manufacturing of rolled products of steel. The appellant had filed refund claim of Rs. 1,98,148.67 on 10.07.1989 on the ground that it had paid duty during the period 6/82 to 7/83 as leviable on Hoop/Flat/Strip of steel, whereas their products as M.S. Bars were exempted from duty as held by Hon'ble Supreme Court. The refund claim of Rs. 1,98,148/- was rejected by the Assistant Commissioner vide Order-In-Original No. 43/CE/Rfd/89 dated 25.10.1989 on the ground that the refund was time barred. Feel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued on the ground of undue enrichment and in the case of Rs. 31,448/- on the grounds of limitation. Vide two Order-In-Original's, the Adjudicating Authority without taking note of the fact that the appellant had already taken suo-moto credit of the amounts and without taking into account the directions given in Order-In-Original dated 01.11.1994 (supra), rejected the refund claim of Rs. 31,448/- and ordered the amount of Rs. 1,99,148.67/- to be credited to consumer welfare fund. 7. The Commissioner (Appeals) rejected appeal of the appellant in respect of refund claim of Rs. 1,99,148.67/- but CEGAT vide its order dated 02.11.2000 ordered that refund should be granted with interest. In the refund claim of Rs. 31,448/- the Commissioner (Appeals) allowed the appeal of the appellant. In both appeal proceedings either before Commissioner (Appeals) or before CEGAT, the fact of suo-moto refund of Rs. 1,99,148.67/- and Rs. 31,448/- by way of taking credit in PLA account on 02.07.1993 was not brought on records by the appellant. 8. On the basis of CEGAT order dated 02.11.2000, the appellant again requested vide letter dated 12.04.2001 and 22.11.2002 for grant of refund again by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was not entitled to, by concealing the facts, is not denied by the appellant in the written submissions. Moreover, no cogent evidence has been brought on record on behalf of the appellant to show its bona fide regarding encashment of the two cheques i.e. one dated 01.04.2003 for Rs. 31488/- and another dated 22.05.2003 for Rs. 1,99,148.67/-. The relevant portion of impugned order dated 22.10.2007 (Annexure P. 25) is reproduced below: 2. It is not disputed that the appellant has availed the refund of the aforesaid two amounts twice. Earlier, the refund was availed by making a suo moto credit entry in the PLA on 02.07.1993 for paying duty on finished goods without getting any formal sanction order enabling the appellant to do so. Thereafter, the appellant again obtained refund of these two amounts by encashing two cheques; one dated 01.04.2003 for Rs. 31,448/- and another dated 22.05.2003 for Rs. 1,99,148/- which were issued in response to their two refund applications dated 07.10.1995. 3. The appellant in their written submissions filed on 17.01.2005 had admitted that the said amounts received again on 01.04.2003 and 22.05.2003 were liable to be given back to the Department. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy or nonpayment 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 penalty shall be payable by the person liable to pay duty or the person who has paid the duty and all proceedings in respect of said duty and interest shall be deemed to be concluded; (b) where any duty as determined under sub-section (10) of section 11A and the interest payable thereon under section 11AA in respect of transactions referred to in clause (a) is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 Sub-section (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. Confiscation and penalty. (1) Subject to the provisions of section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse (or an importer who issues an invoice on which CENVAT credit can be taken] or a registered dealer, - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, 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 duty either by fraud or misrepresentation, the statute requires mens rea as a necessary constituent of such an offence. But when factually no fraud or suppression or misstatement is alleged by the Revenue against the respondent in the show-cause notice the imposition of penalty under Section 11-AC is wholly impermissible. 23. The Court in this connection may re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 36, the Commissioner may impose upon the dealer by way of penalty, a sum not exceeding two thousand rupees. (3A) If a dealer fails to furnish any declaration or any return by the prescribed date as required under sub-section (1) of section 40, the commissioner shall impose upon such dealer by way of penalty for each declaration or return, a sum of two hundred ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the Act, 1969 or not. Sub-section (5) of Section 45 provides that in the case of a dealer where the amount of tax assessed for any period under sections 41 or 50 or re-assessed for any period under Section 45 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 reassessed and the amount paid. Therefore, the moment it is found that a dealer is to be deemed to have failed to pay the tax to the extent mentioned in Sub-section (5), the penalty is automatic. Further, there is no discretion with the assessing officer either to levy or not to levy and/or to levy any penalty lesser than what is prescribed/mentioned in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, 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 before penalty can be imposed under these provisions. Hence once the contravention is established then the penalty is to follow. 6.7 In the case of Guljag Industries (supra) while considering Sections 78 (2) and 78 (5) of the Rajasthan Sales Tax Act, 1994 which provided for penalty equal to thirty percent of the value of goods for possession or movement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 consideration in the decisions relied upon on behalf of the respondent is altogether different from the language used in Section 45 and Section 47 of the Act, 1969. In the case of Dharamendra Textile Processors (supra), this Court was considering section 11AC of the Central Excise Act. In Section 11AC, the words used are fraud, collusion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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