Penalty under Section 4-B(5) cannot stand without mens rea or tax evasion when goods are covered by a recognition certificate.

Penalty under Section 4-B(5) was unsustainable where the assessee had obtained a valid recognition certificate for the notified goods and the fact-finding authority recorded no mens rea or attempt to evade tax. The Tribunal's findings that refined rape seed oil was covered by the certificate and that the assessee had acted without culpable intent left no basis for punitive action. On those factual findings, interference was unwarranted and the revision failed.

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Issues: Whether the penalty imposed under Section 4-B(5) could be sustained where the assessee had obtained a recognition certificate for the goods and the Tribunal had recorded a finding that there was no mens rea or attempt to evade tax.

Analysis: The Tribunal found that refined rape seed oil was a notified good when the recognition certificate was issued, that the assessee had applied for and obtained the certificate in respect of the goods, and that there was no attempt to evade tax. It further recorded a categorical finding that the assessee lacked mens rea. In the absence of any such culpable intention, and in view of the consistent finding on facts, interference with the Tribunal's order was unwarranted.

Conclusion: The penalty was not justified and the revision failed.

Ratio Decidendi: Where the fact-finding authority records that the assessee acted under a valid recognition certificate and there was no mens rea or intention to evade tax, penalty under Section 4-B(5) cannot be sustained.

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