Rule 173H penalty for transformer repairs held unsustainable where permission was sought and no intent to evade duty was found.

Penalty for repairing duty-paid transformers without prior permission under Rule 173H was held unsustainable where permission had been sought repeatedly, a further representation had referred to the earlier requests, and the Commissioner eventually granted permission. The record also showed regular filing of D-3 intimations and no mens rea or intent to evade duty. In these circumstances, the mere absence of prior permission was not enough to justify penal action, and the penalty was set aside.

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Issues: Whether penalty imposed for repairing duty-paid transformers without prior permission under Rule 173H was sustainable when permission had been applied for earlier and the authority found no mens rea or intent to evade duty.

Analysis: The appellants had applied for permission on more than one occasion and had also made a further representation mentioning the earlier requests. Permission was ultimately granted by the Commissioner. The appellate authority had already recorded that there was no mens rea or intent to evade duty and that D-3 intimations were regularly filed. In these circumstances, the mere absence of prior permission did not justify the penalty.

Conclusion: The penalty was not sustainable and was set aside.

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