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2006 (7) TMI 238 - AT - Central ExciseInterpretation of statute - Excise Duty/Cenvat credit - clear finished goods - whether there is any need for mens rea for warranting confiscation and penalty under the provisions of Rule 173Q(1)(a), (b) & (c) of the Central Excise Rules, 1944 - HELD THAT:- The decision of the Apex Court in Gujarat Travancore Agency v. CIT, [1989 (5) TMI 1 - SUPREME COURT] cited by the learned SDR, in the context of Sections 271(1)(a) of the Income Tax Act, 1961, is also very relevant. The Apex Court has held in paragraph 4 that in the case of proceedings u/s 271(1)(a) which provides that a penalty may be imposed if the Income Tax Officer is satisfied that any person has without reasonable cause, failed to furnish the return of total income, the intention of the legislature is to emphasise the fact of loss to Revenue and to provide for a remedy for such loss, although no doubt an element of coercion is present in the penalty. The Court held that 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 prove that a default in complying with the statute has occurred. The Apex Court held that there is nothing in Section 271(1)(a) requiring that mens rea must be proved before penalty can be levied under that provision contrasted with the provisions of Section 276C wherein the element of mens rea was required to be established before imposition of any sentence under that provision. Another judgment relevant in the context of necessity of the ingredient of mens rea is the Supreme Court's decision in the case of Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh, ACC, Calcutta and Others, [1964 (2) TMI 1 - SUPREME COURT] holding that guilty mind is not an essential constituent of Section 52A which absolutely prohibits entry of vessels in which there is any construction, adaptation, alteration or filting made for the purpose of concealing goods. Following the ratio of the above decisions, we answer the issue referred, by holding that mens rea is not an essential ingredient to warrant confiscation and penalty under the provisions of Rule 173Q(1)(a),(b) & (c) of the Central Excise Rules, 1944. The papers are now returned to the referral Bench for disposal of the appeals in the light of the above.
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