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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 ..... y 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. Feeling aggrieved, the appellant filed writ petition bearing CWP No. 773 of 1990 before this Court against the above said Order-In-Original and this Court vide order dated 12.04.1991 ordered that an amount of Rs. 1,98,148.67 along with cost of Rs. 1,000/- be paid to the appellant within three months. The respondent-Department challenged order dated 12.04.1991 but their claim has been finally rejected upto Hon'ble Supreme Court. Thereafter, the appellant again requested for refund of Rs. 1,98,148.67/- vide its letter dated 30.05.1991 in terms of order passed by this Court. 3. In another demand case pertaining to the appellant, CEGAT vide its order No. E/165/92-BI dated 17.07.1992 set aside the demand of Rs. 31,448/- and held that Show Cause Notice dated 01.06.1982 was time barred. The appellant vide its letter dated 08.12.1992 made a request to then jurisdictional Assistant Commissioner for refund of Rs. 31,448/- because the said amount had already been paid by them in July, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 suppressing fact of suo moto availment of credit. Refund of Rs. 1,99,148.67/- and Rs. 31,448/- were granted by way of issuing cheques. Both the cheques were got encashed by the appellant. 9. The appellant did not respond to the two letters dated 23.09.2003 and 13.11.2003, issued by the Department asking them to deposit the amount of refund availed by the appellant twice wrongly. The appellant did not answer and the Department issued Show Cause Notice dated 22.01.2004 to recover amount. The Adjudicating Authority vide impugned Order-In-Original adjusted the refund claims of Rs. 1,98,148.67/- along with cost of Rs. 1,000/- and the refund claims of Rs. 31,448/- against suo moto credit entries made in their PLA account by the appellant on 02.07.1993. The Adjudicating Authority also confirmed demand of Rs. 31,448/- and Rs. 1,99,148.67/- holding that the same was refunded erroneously alongwith interest w.e.f. the date of cheques and also imposed a penalty of Rs. 2,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund 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 was, however, urged that no interest should be demanded nor any penalty imposed in respect of those amounts. 4. to 7. xxx xxxx xxxx 8. On going through the relevant material on record and the reasoning adopted by the authorities below, it clearly appears that the appellant had even after taking their refund of the amounts in question by making suo moto credit entry in the PLA on 02.07.1993 again applied for refund of these two amounts on 07.10.1995. The contention that, the communication sent on 07.10.1995 was only a letter and not a refund application, is wholly misconceived and contrary to the facts on record. It has been found that after the order dated 01.11.1994 was passed by the Deputy Commissioner, the appellant made two refund applications, both on 7.10.1995, under covering letter dated 07.10.1995 requesting for refund of the claim amounts at the earliest. In these communications/applications, the fact of having availed the refund by su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings 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 paid within thirty days of the date of communication of the order of the Central Excise Officer who has determined such duty, the amount of penalty liable to be paid by such person shall be twenty-five per cent of the penalty imposed, subject to the condition that such reduced penalty is also paid within the period so specified; (c) where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud or collusion or any willful mis-statement or suppression of facts. Or contravention of any of the provisions of this Act or of 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 equal to the duty so determined: Provided that in respect of the cases where the details relating to such transactions are recorded in the spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 issued under these rules; (b) does not account for any excisable goods produced or manufactured or stored by him, or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty. Then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse [or an importer who issues an invoice on which CENVAT credit can be taken) or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [five thousand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation, 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 remind itself of the fundamental principle: (AC P. 496 E) " ......that an accused person cannot be convicted without proof of mens rea, unless, from a consideration of the terms of the statute and other relevant circumstances, it clearly appears that that must have been the intention of Parliament." (See the decision of the House of Lords in Vane v. Yiannopoullos and the opinion of Lord Reid at AC p. 496 E: All ER p. 823.) 24. In Vanes, the word "knowingly" was used in the statute as a condition of creating liability. 25. The aforesaid dictum of Lord Reid has been followed by this Court also. A reference in this connection may be made to Union of India v. Rajasthan Spg. & Wvg. Mills. This Court considering Section 11-AC of the Act held in ELT para 19 at p. 12 of the Report as follows: (SCC p. 459, para 29) "29. From the aforesaid discussion i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 rupees for every month or part of a month comprised in the period commencing from the day immediately after the expiry of prescribed date and ending on the date on which a declaration or return is furnished. (4) If a dealer fails without sufficient cause to furnish any declaration or any return [as required by proviso to Sub-section (1) or Sub-section (2) of section 40], the Commissioner may impose upon the dealer by way of penalty, a sum not exceeding two thousand rupees. (5) Where in the case of a dealer the amount of tax - (a) assessed for any period under section 41 or 50; or (b) reassessed for any period under section 44; exceeds the amount of tax already paid under sub-section (1), (2) or (3) of section 47 by the dealer in respect of such period by more than twenty five p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 deemed to have failed to pay the tax to the extent of difference between amount so assessed or re-assessed as aforesaid and the amount paid. Considering sub-section (5) of Section 45 of the Act, 1969, if a dealer is deemed to have failed to pay the tax to the extent mentioned in sub-section (5), there shall be levied on such dealer a penalty not exceeding one and one-half times the difference referred to in sub-section (5). Under the circumstances, to the aforesaid extent and on the difference of tax, as per sub-section (5) of Section 45, the respondent assessee dealer shall be liable to pay the penalty as mentioned under Sub-section (6) of Section 45. 6.3 Section 45 confers power to levy/impose penalty in certain cases. In certain cases, enumerated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Section 45 (6) of the Act, 1969. In that view of the matter, there is no question of considering any mens rea on the part of the assessee/dealer. 6.5 At this stage, a few decisions of this Court as well as decisions of the Gujarat High Court (on levy of penalty and interest under the Gujarat Sales Tax Act) are required to be referred to. In the case of Dharamendra Textile Processors (supra) after referring and considering another decision of this court in the case of Shriram Mutual Fund (supra), it is observed and held that when the term used "shall be leviable," the adjudicating authority will have no discretion. 6.6 In the case of Shriram Mutual Fund (supra), while dealing and/or considering similar provision under the SEBI, it is observed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 of goods, whether seized or not, in violation of the provisions of Clause (a) of sub-section (2) or for submission of false or forged documents or declaration, this Court in paragraph 9 observed as under: - "9. Existence of mens rea is an essential ingredient of an offence. However, it is a rule of construction. If there is a conflict between the common law and the statute law, one has to construe a statute in conformity with the common law. However, if it is plain from the statute that it intends to alter the course of the common law, then that plain meaning should be accepted. Existence of mens rea is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 or any wilful misrepresentation or any wilful misstatement or suppression of facts" and "intent to evade payment of duty." In that view of the matter, the mens rea will play an important role. Therefore, the said decision shall not be applicable while considering Section 45 and Section 47 of the Act, 1969. A similar decision in the case of Pepsi Foods Ltd (supra). also shall not be applicable and/or of any assistance to the respondent assessee-dealer." 17. A bare reading of Section 11AC of the Act, 1944 shows that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, for any reasons other than the reason of fraud or collusion or any willful mis-st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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