Mandatory excise penalty under Section 11AC upheld without mens rea and without discretion to go below the minimum

Penalty under Section 11AC of the Central Excise Act, 1944 was treated as a civil consequence for duty evasion, and the Court held that mens rea is not an implied ingredient of the provision. Reading the statute as plain and unambiguous, it declined to add a requirement the legislature did not express and rejected any inferred discretion to reduce the penalty below the statutory minimum. The earlier view treating mens rea as essential was disapproved, and the mandatory character of the penalty scheme was affirmed.

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Issues: Whether penalty under Section 11AC of the Central Excise Act, 1944 and the allied rules was mandatory without proof of mens rea, and whether the adjudicating authority had discretion to impose a penalty below the statutory minimum.

Analysis: The statutory scheme showed that the penalty provisions were enacted to deal with civil defaults involving evasion of duty and were linked to determination of duty under Section 11A of the Central Excise Act, 1944. The use of mandatory language left no room to read an unexpressed requirement of mens rea into the provision. The Court also held that where the language of a fiscal statute is plain and unambiguous, the court cannot supply a casus omissus or rewrite the provision to create a discretion that the legislature did not provide. The reasoning in the earlier view treating mens rea as essential was disapproved, and the position that the penalty provisions were mandatory was affirmed.

Conclusion: Mens rea is not an essential ingredient for penalty under Section 11AC of the Central Excise Act, 1944, and no discretion exists to impose penalty below the prescribed minimum.

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