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TMI Blog2010 (11) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... by the jurisdictional Central Excise officers that the Appellant had another factory at Lucknow manufacturing exempted goods falling under Sub-Heading 3003.31 of the Tariff from where goods value at Rs. 3,25,05,397/- had been cleared for home consumption during 2003-04 and if the value of goods cleared from Lunknow unit during 2003-04 is added to the value of goods cleared during 2003-04 from Noida unit - Rs. 80,42,419/- the aggregate value of all excisable goods cleared during 2003-04 from both the factories of the Appellant company would be Rs. 4,05,47,816/- and, hence, they would not be eligible from SSI exemption during 2004-05 while they had been availing of exemption during this period. It is on this basis that Show Cause Notice dated 24-2-2005 was issued to the Appellant for demand of Central Excise duty amounting to Rs. 2,99,442/- along with interest under Section 11AB in respect of clearance of excisable goods from Noida unit during April 2004-Jan. 2005 period and also imposition of penalty on the Appellant under Rule 25 of the Central Excise Rules, 2002. 1.2 The Show Cause Notice was adjudicated by the Deputy Commissioner vide Order-in-Original No. 23/05 dated 31-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted under Rule 25(1) for which mens rea is not required to be proved. 4. We have carefully considered the submissions of the learned Departmental Representative, the grounds of appeal in the Appellant's memorandum of appeal and have also perused the records of the case. In this case, the appellant have not disputed the lower authority's finding that during 2004-05 they were not eligible for SSI exemption under Notification No. 8/2003-C.E. The challenge to the Commissioner (Appeals) in order is only on two counts :- (a) The price charged from the customers is to be treated as cum-duty price and duty liability must be recomputed by determining the assessable value after abating the duty from the sale price. (b) Penalty under Rule 25(1) of Central Excise Rules, 2002 is not imposable on the Appellant. 5. Coming to the question as to whether in accordance with the judgements of Apex Court in the case of Shree Chakra (supra) and CCE, Delhi v. Maruti Udyog Ltd. reported in 2002 (141) E.L.T. 3 (S.C.), the sale price of the goods is to be treated as cum-duty price, the findings of the Commissioner (Appeals) are that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods during the relevant years by availing duty exemption and that unless it is shown by the assessee that the price of the goods includes excise duty payable by him, there would be no question of exclusion of duty element from the sale price, are in respect of Section 4, as it stood during the period prior to 14-5-2003. With effect from 14-5-2003, an important amendment was made to Section 4 by Section 136 of the Finance Act, 2003 by which an explanation was added to sub-section (1) of Section 4. The explanation added is as under :- "Explanation. - For the removal of doubts, it is a declared that the price cum-duty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price cum-duty, excluding sale tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods." Thus, in terms of this explanation, the price charged by an assessee from his buyer including the money value of the additional consideration, if any, flo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to this rule reads as under :- "Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules, made thereunder with intent to evade payment of duty the person who is liable to pay duty as determined under sub-section (2) of Section 11A, shall be liable to pay a penalty equal to the duty so determined. Provided that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, by the court, then, for the purposes of this section, the duty as reduced or increased as the case may be, shall be taken into account." 6.1 From a reading of Rule 25(1) and Section 11AC it will be seen that Rule 25(1) together with Section 11AC provide for two types of penalties :- (i) penalty for contraventions of the type mentioned in clause (a), (b) and (c) of Rule 25(1) i.e. removal of any excisable goods in contravention of any of the provisions of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to intention in clauses (a), (b) & (c) of Rule 173Q(1) would show that for imposition of penalty for contraventions of the type mentioned in these clauses, existence of mens rea is not required. Same view has been expressed by Hon'ble Supreme Court in case of Gujarat Travancore Agency v. CIT reported in 1989 (42) E.L.T. 350 (S.C.) wherein with regard to the provisions of Section 271(1)(a) of the Income Tax Act, 1961, Hon'ble Court held that since Section 271(1)(a) does not require mens rea to be proved for imposition of penalty for failure to furnish the return of total income, penalty would be attracted for non-filing of return and for imposition of penalty for this contravention, mens rea is not required to be proved. 6.2 Since in this case, the goods were cleared by the Appellant during April 2004-Jan. 2005 paid without discharging duty liability and thereby contravening the provisions of Rules 4, 6 & 8 of the Central Excise Rules, and this contravention has not been disputed, penalty under Rule 25(1)(a) would be attracted. We, therefore, do not find any infirmity in the part of the impugned order upholding the penalty on the appellant. 7. In view of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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