TMI Blog2013 (10) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... v. C.C., Delhi [1993 (7) TMI 220 - CEGAT, NEW DELHI ] - the components which were required for completion of one air-conditioning machine could be reconsidered as essential. Penalty u/s 11AC –Held that:- So far as the penalty was concerned the Tribunal had rightly set it aside - Mens rea is an essential part for levy of penalty - Where a provision of statute was not clear and there was divergent judicial pronouncements, it cannot be said the there was mens rea on the part of manufacturer if he chooses to follow his course of action in the light of one of the judicial pronouncements - It had been rightly observed to be by the Tribunal that the issue was one of interpretation and application of Rule 2(1) of the Interpretative Rules - The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by invoking Section 11AC read with Rules 173(a) of the Central Excise Rules. Penalty of Rs. 10 lakhs was imposed on Sri Dinesh Chabbra, Chief Financial Officer of DAS Ltd. under Rule 209A of Central Excise Rules. Interest was also levied. The said order was challenged by the respondent herein before the Tribunal who by the order under appeal has allowed the appeal and set aside the levy of penalty. 4. In the memo of appeal following substantial questions of law have been sought to be raised. (a) Whether while remanding the matter for adjudication afresh, the Appellate Tribunal being creation of the statute itself can take away the enforcement/application of the statutory provisions of Section 11AC of the Act prior to adjudication by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have the power to do being the creation of statute itself? 5. However during the course of argument, the learned counsel for the appellant confined his argument with respect to only that portion of the order of the Tribunal whereby the Tribunal while remanding the matter observed that the penalty under Section 11AC of the Central Excise Act is not imposable either on the appellant-company or on its financial advisor on Sri Dinesh Chhabra. 6. It was submitted that the Tribunal should have remanded the matter back to the Commissioner in its entirety by leaving the matter open with regard to penalty also. In reply, Sri Nishant Mishra, Advocate submits that Tribunal has committed no error in holding that it was not a case for levy of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has rightly set it aside. Mens rea is an essential part for levy of penalty. Where a provision of statute is not clear and there was divergent judicial pronouncements, it cannot be said the there is mens rea on the part of manufacturer if he chooses to follow his course of action in the light of one of the judicial pronouncements. It has been rightly observed e by the Tribunal that the issue is one of interpretation and application of Rule 2(1) of the Interpretative Rules. 10. Viewed as above we do not find any substance in the aforesaid argument of the learned Standing Counsel that the penalty matter should have been left open for re-consideration by the Commissioner. Clearly, no case of levy of any penalty was made out and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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