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2014 (1) TMI 1213 - HC - Central ExciseConfiscation and penalty under Rule 173Q - Mens Rea - Clandestine removal of goods - Whether the provisions of Rule 173Q of the Central Excise Rules, 1944 is attracted in the absence of any intention to waive the payment of central excise duty and/or in absence of removal of any excisable goods or any entry of any excisable goods in RG-1 Register - Held that:- show cause notice was issued to the appellant not only for holding of excess stock with the intention to clear the goods clandestinely and evade payment of central excise duty but also for deliberately mis-stating the production figures in RG-1 Register and filing of returns giving false production figures. It cannot, therefore, be contended that the show cause notice was issued only for violation of Rules 53 and 54 - Rule 173Q deals with confiscation and penalty and Rule 209 deals with penalty provision. Rule 173Q confiscation and penalty arise under breach of duty provided in the Central Excise Act and Central Excise Rules, which creates strict liability without proof of mens rea. As per Rule 173G(4)(a), every assessee to maintain such accounts, as the Commissioner may from time to time require of the production. Rule 53 deals with daily stock account and Rule 54 deals with monthly returns. Non-maintaining of accounts and non-accounting of the manufactured goods in the statutory records attracts the provision of Rule 173Q. Unless there is something in the language of the statute indicating the need to establish the element of mens rea, it is generally sufficient to show that a default to comply with the Rules has occurred attracting confiscation and penal provisions. There is nothing in Rule 173Q or Rule 209, which required that mens rea/intention need to be established - The Legislature used the conjunction or in Rule 173Q for Rule 173Q(1)(a) and Rule 173Q(1)(d), the Court cannot read into Rule 173Q(1)(b) that there should be the intention to evade payment of excise duty - mens rea of the appellant to remove the manufactured goods with intention to evade payment is not essential - appellant had not accounted for the manufactured goods and had not made entries in RG-1 Register. Non-accounting of manufactured goods in the statutory records falls within the ambit of Rules 173Q(1)(b) attracting provision of confiscation and penalty - Tribunal had taken a lenient view reducing the redemption fine to ₹ 3 lakhs and also penalty to ₹ 3 lakhs - Decided against assessee.
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