Mens rea is required for excise penalty where the alleged contravention involves deliberate evasion and no fraud is shown.

Penalty under Rule 13(1) of the CENVAT Credit Rules, 2002 is not attracted unless the statutory offence is supported by mens rea. Where there is no allegation or proof of fraud, suppression, or misstatement, the penal provision for excise-related contraventions cannot be invoked. The stated position treats deliberate evasion of duty as requiring a mental element before penalty can be imposed, and absence of such intent defeats penal liability.

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Issues: Whether penalty under Rule 13(1) of the CENVAT Credit Rules, 2002 could be imposed in the absence of mens rea.

Analysis: The settled position applied by the Court is that where the statutory offence is founded on deliberate evasion of duty, the existence of mens rea is a necessary ingredient. In the absence of any allegation or proof of fraud, suppression, or misstatement, penal liability under the relevant excise penalty provision is not attracted.

Conclusion: Penalty could not be imposed absent mens rea.

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