- (1.) By way of this order, we shall dispose of four appeals namely CEA Nos. 22, 10, 71 and 72 of 2013. For the sake of convenience, facts are being taken from Central Excise Appeal No. 22 of 2013. Counsel for the appellant submits on instructions that he confines challenge in these appeals to the levy of penalty. Counsel for the appellant has filed three amended questions of law, in Court today, which are taken on record.
(2.) Counsel for the appellant submits that finding recorded by the Additional Commissioner, Central Excise, Ludhiana, that penalty, can be levied irrespective of mens rea, is illegal. A bare perusal of Section 11AC(1)(a) of the Central Excise Act, 1944 (hereinafter to be referred as "the Act"), reveals that penalty can only be levied, if duty has not been levied, paid, has been short levied, paid or erroneously refunded, by reason of fraud, collusion or any willful misstatement or suppression of facts or contravention of any of the provisions of the Act or Rules. The exercise of power to impose penalty must, therefore, be preceded by a finding, in terms provided by Section 11AC(1)(a) of the Act. A perusal of the order passed by the Additional Commissioner, Central Excise, Ludhiana, reveals that penalty has been imposed without recording a finding in terms of Section 11AC(1)(a) of the Act. It is further submitted that the order passed by the Assessing Authority was set aside by the Appellate Authority. The Tribunal has restored the order passed by the Assessing Authority without considering the appellant's plea that penalty has been imposed in violation of Section 11AC(1)(a) of the Act.
(3.) Counsel for the respondent submits that as violation of provisions of the Act and the Rules, has been proved, mens rea is inherent in such a violation. The finding recorded by the Assessing Authority that mens rea is not required, has to be read in the above context. The failure of the appellant to deposit requisite duty is an attempt to evade duty by misstating relevant facts and therefore, attracts penalty.;