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2010 Supreme(SC) 1473
SUPREME COURT OF INDIA
M.K. SHARMA, ANIL R. DAVE, JJ.
Commissioner of Central Excise, Vapi – Appellant
Versus
Kisan Mouldings Limited – Respondent
Civil Appeal No. 0 of 2010, S.L.P. (C) Nos. 4843-4844 of 2009
Decided On : 13-09-2010
The interpretation of penalty under Section 11-AC and the application of the bona-fide mistake principle in determining the intention to evade tax.
Headnote:
Penalty - Bona-fide Mistake - Interpretation of Section 11-AC
Fact of the Case:
The appeals challenged the order of the Gujarat High Court affirming the findings of the Tribunal, which had concluded that the case involved a bona-fide mistake that was subsequently rectified.
Finding of the Court:
The court, after considering the findings of the Tribunal and the High Court, held that no interference was called for in the appeals, citing the ratio of the decision in Union of India vs. Rajasthan Spg. and Wvg. Mills, (2009) 238 ELT 3, which defined the penalty under Section 11-AC as punishment for deliberate deception with the intent to evade duty.
Issues: Interpretation of penalty under Section 11-AC, bona-fide mistake, intention to evade tax
Ratio Decidendi: The court found that since the case involved a bona-fide mistake and there was no intention to evade tax, in line with the ratio laid down in Union of India vs. Rajasthan Spg. and Wvg. Mills, no interference was called for.
Final Decision: The appeals were dismissed.
ORDER :
1. Leave granted.
None appears for the respondent despite service of notice.
2. In these appeals what is under challenge is the order of the Gujarat High Court dated 8-7-2008, whereby the High Court has affirmed the findings of the Tribunal dated 15-12-2006. We have considered the findings recorded by the Tribunal. In the last paragraph of its judgment, the Tribunal came to a definite finding that the present was basically a case of bona-fide mistake which was subsequently rectified. The aforesaid finding also came to be upheld by the High Court as against which the present appeals are filed.
3. Having heard the learned counsel appearing for the appellant and on going through the record, we are of the considered opinion that in these appeals no interference is called for in our hands, particularly, in view of the ratio of the decision of this Court in Union of India vs. Rajasthan Spg. and Wvg. Mills, (2009) 238 ELT 3. This Court has observed that the penalty under Section 11-AC, as the word suggests, is “punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section.”
4. Since the present is a case of bona-fide mistake and because there was a categorical finding that there was no intention to evade tax by the respondent, therefore, in terms of the ratio laid down by this Court in the aforesaid decision, no interference is called for.
The appeals are dismissed.
