2009 (6) TMI 955

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....ssessed by the assessing officer in respect of alleged misuse of form C in respect of products such as wire mesh, X-ray film and accessories purchased by the assessee from other States for which form C was utilised. The assessing authority had come to the conclusion that the purchase of the materials was not directly required for the purpose of manufacture of the goods and hence use of form C attracts penalty under section 10A and imposed penalty for the abovesaid purchase. The relevant portion is extracted below: "4. I heard the arguments of both the representatives and verified the records produced before me. The appellants have mainly relied on the fact that the goods purchased were meant for being used in the manufacturing of tea. Th....

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....ccessories would show that the assessee was eligible for inclusion of these goods in form B certificate and hence there was no mens rea for the levy of penalty as against the assessee. It is also pleaded that the assessee only acted bonafidely and he had no motive to escape the liability by using C declaration form and, hence, no penalty should be levied. That apart, before penalty could be imposed, the circumstances established must reasonably point to the conclusion that the assessee concerned has consciously committed the acts or omissions which go to constitute the offence and the burden would be on the Department to prove the existence of such circumstances. The Tribunal after hearing both parties have clearly given a finding whi....

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....) of the Act. When this question of having no mens rea was established by the Tribunal by its findings, whether the question of imposition of penalty under section 10(b) would arise in this case. In this connection, we are fortified by the Full Bench decision of this court in State of Tamil Nadu v. Nu-Tread Tyres reported in [2006] 148 STC 256 wherein, the Full Bench has categorically held as under in paragraph 21 (at page 267): "21. Section 10(b) of the Act provides for an offence if any person being a registered dealer falsely represents when purchasing any class of goods that goods of such class are covered by his certificate of registration. The expression 'falsely represent' clearly shows that the element of mens rea is t....