Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 911 - AT - Central ExcisePenalty under Rule 173GG of Central Excise Rules, 1944 - Mens Rea - Held that:- Without foundation in the original show cause notice to levy penalty under Rule 173GG, right to defense cannot be denied. No one can be held deterrently violating the principles of natural justice. The most interesting feature of this appeal is that there was disproportionate penalty of ₹ 1,70,000/- for the default of payment of duty of ₹ 7,235/-. It is settled principle of law that the object of the rule is certainly to safeguard Revenue, but mens-rea is basic element to judge imposition of penalty to prevent disproportionality taking into the gravity of the breach committed into consideration. Blanket levy of penalty of ₹ 1,70,000/- is therefore considered to be disproportionate looking to the gravity of the matter since duty default was ₹ 7,235 - Without mens rea, if penalty is levied that becomes arbitrary and it affects the fundamental rights. Therefore, rule making authority being subordinate to legislation no scope is provided to that authority to prescribe any disproportionate penalty. This ground is alone enough to set aside the penalty imposed. - element of mens rea was also recognized by the Hon’ble Kerala High Court in the case of Superintendent of Central Excise Vs. Sance Pharmaceuticals [2009 (1) TMI 288 - HIGH COURT OF KERALA AT ERNAKULAM] - Decided in favour of assessee.
|