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TMI Blog2004 (3) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... atements from the appellants under Section 14 of the Central Excise Act and made allied enquiries. On the basis of the results of investigations, the department issued separate show-cause notices alleging non-accountal of goods with intent to evade payment of duty and proposing to confiscate the excess goods and also to impose penalties. The show cause notices were contested. The original authority, which adjudicated the dispute, confiscated the goods with option to the party to redeem the same on payment of fine. It also imposed penalties on the party. Aggrieved by the orders of the original authority, the party preferred appeals to the Commissioner (Appeals). The appellate authority upheld the confiscation but reduced the quantum of redem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rules, 1944 for the purpose of confiscating excisable goods and imposing penalty on its manufacturer. Ld. DR for the respondent relies on the following High Court's decisions: - 1. Nizam Sugar Factory Ltd. v. CCE Ors. [1987 (27) E.L.T. 40 (A.P.)] 2. Kirloskar Brothers Ltd. v. U. O.I. [1988 (34) E.L.T. 30 (Bom.). The DR draws support from the above decisions to argue that, even in the absence of mens rea, confiscation and penalty could be ordered under Rule 173Q (1) where non-accountal of excisable goods was found. 4. In respect of the excess of raw materials found, counsel submits that Rule 173Q of the Central Excise Rules, 1944 has been held to be inapplicable to duty-paid raw materials found short or in exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not deal with Clause (d) of Rule 173Q(1). Kirloskar Brothers, therefore, does not advance the Revenue's case. It is not in dispute that neither of the lower authorities found mens rea against the appellants, whether in respect of alleged non-accountal of raw material or alleged non-accountal of finished goods, nor was there anything in the show-cause notices to indicate that the department had a case that the appellants had deliberately indulged in non-accountal with intent to remove the goods clandestinely without payment of duty. In the absence of mens rea, the confiscation and penalty cannot be sustained in respect of the finished goods. 6. In respect of the raw materials, again, the allegation was clandestine removal. This allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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