COMMNR. OF CENTRAL EXCISE, CHANDIGARHversusM/S. PEPSI FOODS LTD.

                     [2010] 14 (ADDL.) S.C.R. 836


A        COMMNR. OF CENTRAL EXCISE, CHANDIGARH
                                     v.
                       MIS. PEPSI FOODS LTD.
                (Civil Appeal Nos. 1921-1923 of 2003)
                         DECEMBER 10, 2010
B
    [D.K. JAIN, ASOK KUMAR GANGULY AND H.L. DATTU,
                          JJ.]

         Central Excise Act, 1944 - ss. 4(1)(a)(iii) and 11AC -
C Valuation of excisable goods for purposes of charging excise
    duty - Determination of sale price - Assessee selling its
    goods to a company, 'related person' - Assessee claiming
    exclusion of freight charges arising between the factory of
    assessee to depot of related person as sale occurred at its
D   factory gate - Revenue's case that sale occurred at the time
    of purchase of the final products by whole sellers from related
    person - Show cause notice - Demand of excise duty -
    Authority holding that freight charges to be included in the
    sale price as the place of removal of the goods was the depot
E   of the related person - Tribunal holding that the freight
    charges should be excluded - Sustainability of - Held: Not
    sustainable - Provision of s. 4(1 )(iii)(a) (as it was prior to 2000)
    is applicable and not s. 4(2) - Normal price of sale would
    deemed to be the one at which the goods are ordinarily sold
F   by 'related person' to whole sellers - Place of removal for such
    goods should be depot of the related person from where the
    goods are sold to whole sellers - There was no finding of fraud
    or mis-statement against assessee in the show cause notice
    - Thus, imposition of penalty, equal to the amount of duty in
G   the order-in-original, not permissible.

       s. 11AC - Imposition of penalty under - Necessary
  ingredient - Held: In order to attract the penalty provision ul
  s. 11 AC, criminal intent or 'mens rea' is a necessary
  constituent - However, when factually no fraud or suppression
H                              836
COMMNR. OF CENTRAL EXCISE, CHANDIGARH v.               837
           PEPSI FOODS LTD.
or mis-statement is alleged by the revenue against assessee   A
in the show cause notice, imposition of penalty is wholly
impermissible.

     The respondent-assessee was engaged in the
manufacturing of edible goods. Till the year 1998, the B
respondent sold 96% of the goods to 'FL' Company as
a 'related person' and 4% to independent wholesal~
buyers. Thereafter, the respondent started manufacturing
the products on behalf of 'FL' Company. As regards the
valuation of the goods for charging excise duty, the C
Revenue asserted that the sale occurred at the time of
purchase of the final products by the whole sellers from
'FL' Company, but the respondent claimed that the sale.
occurred at its factory gate. The respondent was issued·
show cause notice. The Revenue not being satisfied with
the respondent's reply to the notice, demand~d excise D
duty. The respondent filed an appeal. The appellate
authority held that the freight charges arising between the
factory of the respondent and the depot of the related
person were to be included in the sale price as the place
of removal of the goods was the depot of the related · E
person. The Tribunal set aside the order of the appellate
authority holding that the place of removal continues to
be the assessee's factory, thus, the freight charges were
to be excluded. Therefore, the Revenue filed the instant
appeal.                                                     f
    Partly allowing the appeals, the Court

    HELD: 1.1 The transaction between the respondent-
assess_ee and 'FL' Company has to be understood as
one where sale price cannot be known. In situations           G
where the assessee sold its goods to a related person, it
was prudent to understand that the price in such a sale
would be deliberately understated so as to evade taxation
within the scheme of the Act. It was to dissuade such
                                                              H
    838   SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


  A sales that the legislature decided to deem the price of the
    goods at the time of their sale by the related persons to
    wholesale market. The 'normal price' is mentioned in
    Section 4 (1) (a) of the Central Excise Act, 1944. [Para 9]
    [843-8-D]
  B
         1.2 In the instant case,. the period in question is
    between 01.11.1997 and 28.02.1999. It is not disputed that
    'FL' Company is the 'related person' of the respondent
    under Section 4(4)(c) of the Central Excise Act, 1944.
. C Section 4(2) does not apply. The provision of Section
    4(1)(a)(iii) as it stood at the relevant time is applicable
    whereby the normal price of sale would be deemed to be
    the one at which the goods are ordinarily sold by 'related
    person' to whole sellers. Therefore, the place of removal
    for such goods should be depot of the related person
  D from where the goods are sold to whole sellers, instead
    of the factory gate of the assessee. The finding of the
    Customs, Excise and Gold (Control) Appellate Tribunal
    that the respondent was justified in claiming exclusion of
    freight charges arising between the factory gate of the
  E respondent to the depot of the related person, cannot be
    sustained. [Paras 12, 15 and 17] [845-G-H; 847-8; 848-B]

       Commissioner of Central Excise, Belgaum v. Akay
    Cosmetics (P) Ltd. (2005) 3 SCC 764 - relied on.
F        Union of India and Ors. v. Bombay Tyre International
    Limited and Ors. (1984) 1 SCC 467; Ujagar Prints etc. etc.
    v. Union of India and Ors. AIR 1989 SC 972 - referred to.
      2.1 In the instant case, in the order-in-original a
G penalty was imposed which is equal to the amount of
  duty. Such penalty was imposed in exercise of power
  under Section 11 AC of the Act. From a perusal of Section ·
  11 AC especially the portion that by reasons of fraud,
  collusion or any wilful mis-statement or suppression of
H facts, it is clear that in order to attract the penalty
COMMNR. OF CENTRAL EXCISE, CHANDIGARH v.              839
           PEPSI FOODS LTD.
provision under Section 11 AC, criminal intent or 'mens      A
rea' is a necessary constituent. In the reply to the show
cause notice the stand taken by the respondent was that
it was paying the duty and there was no malafide
intention on its part to evade the payment of duty; and
that the goods were cleared from the factory only on         B
payment of duty. This stand was not found to be
incorrect in the order-in-original. As such the imposition
of penalty of the equal amount of duty under the order-
in-original, cannot be sustained. [Paras 18 and 19) [848-
D-H; 849-A-B]                                                C

    2.2 When a statute creates an offence and an
ingredient of the offence is a deliberate attempt to evade
duty either by fraud or misrepresentation, the statute
requires 'mens rea' as a necessary constituent of such
an offence. But when factually no fraud or suppression       D
or mis-statement is alleged by the revenue against the
respondent in the show cause notice, the imposition of
penalty under Section 11 AC is wholly impermissible.
[Para 20] [849-C-D]
                                                             E'.
    Union of India v. Rajasthan Spinning & Weaving Mills
2009 (238) E.L.T. 3 (S.C.) - referred to.

      Vane v. Yiannopoul/os (1964) 3 All ER 820 - referred
to.
                                                             F'
    2.3 The part of the order-in-original which imposes
penalty without any finding of fraud or mis-statement·
against the respondent, is quashed. Save as aforesaid,
the order-in-original is upheld. [Para 24) [850-B-C]
                                                             G
                     Case Law Referen(;e:
      AIR 1989 SC 972          Referred to      Para 11
      (1984) 1 sec 467         Referred to      Para 14
      (2005) 3 sec 764         Relied on        Para 16      H
    840     SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A         (1964) 3 All ER 820         Referred to        Para 21
          2009 (238) E.L.T. 3 (S.C.) Referred to         Para 23
        CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
    1921-1923 of 2003.
B
        From the Judgment and Order dated 08.08.2002 of the
    CEGAT, Bench-A, New Delhi in Final Order No. 353-355 of
    2002.

       R.P. Bhatt, D.K. Thakur, Rashmi Malhotra, Vibhav Misra,
C B.K. Prasad and Anil Katiyar for the Appellant.

          B.L. Narsimhan and Alok Yadav for the Respondent.

          The Judgment of the Court was delivered by.
D      GANGULY, J. 1. These statutory appeals (Civil Appeal
  Nos. 1921-1923 of 2003) have been filed under Section 35-L
  (b) of the Central Excise Act, 1944 (the Act), against the
  judgment and final Order No. 353-35512002-A, dated 8th
  August, 2002, passed by the Customs, Excise and Gold
E (Control) Appellate Tribunal, Bench-A, New Delhi.

       2. The material facts are that the respondent-assessee, Ml
  s. Pepsi Foods Ltd. is engaged, inter alia, in the manufacture
  of edibles, marketed under the names of Potato Chips, Baked
F Cheetos Balls, Monster Munch, etc. These are covered under
  Chapter Sub-Headings 2001.10 and 1904.10 of the Central
  Excise Tariff Act, 1985 (Act 5 of 1986). Uptill 12th January,
  1998, as much as 96% of these products manufactured by the
  respondent. were sold to Mis. Frito-Lay India, a 'related person',
G and the balance of 4% were sold to independent wholesale
  buyers. From 12th January, 1998, the sale pattern between the
  two was changed, wherein Mis. Pepsi Foods Ltd. started
  manufacturing the aforesaid products on behalf of Mis. Frito-
  Lay India.

H
 COMMNR. OF CENTRAL EXCISE, CHANDIGARH v. 841
  PEPSI FOODS LTD. [ASOK KUMAR GANGULY, J.]
      3. By a communication dated 15th December, 1997                 A
addressed to the Assistant Commissioner, Central Excise,
Division Jalandhar, the respondent stated that it had been
paying excise duty on its manufactured excisable goods after
taking into account inter alia, the costs of raw materials, packing
materials, conversions and their profit margin. Subsequently it       B
calculated and paid the differential duty, on the price at which
the final products were sold by M/s. Frito-Lay India to its
wholesale dealers. It enclosed certificate of a chartered
accountant in support of its calculations. In its submission of
Annexure-A as required under Rule 173C (3A) of Central Excise         c
Rules, 1944, it mentioned that the sale of the products occurred
at its factory gate. It was also evident from the letter that the
final products were entering the market stream when they were
being sold by M/s. Frito-Lay India to their wholesale dealers.

     4. The Revenue, however, accepted the incidence of sale          D
at the time of purchase of the final products by the whole sellers
from M/s. Frito-Lay India and not, as submitted by the
respondent-assessee, at the factory gate. Resultantly, a show-
cause notice dated 13th November, 1998 was issued to the
respondent and to that the respondent showed cause stating            E
inter alia that the sale to the whole sellers was being effected
from the depot of the related person, viz. M/s. Frito-Lay India.
Dissatisfied with the reply, the Revenue demanded duty of
Rs.12,26,215/-.
                                                                      F
     5. Aggrieved, the respondent moved the Commissioner of
Central Excise (Appeals), Chandigarh. The Commissioner,
however, held that the freight charges arising between the
factory of the respondent and the depot of the related person
were to be included in the sale price as the place of removal         G
of the goods was the depot of the related person.

    6. Aggrieved thereby, the respondent appealed to the
Central Excise and Gold (Control) Appellate Tribunal, New
Delhi. The Tribunal overruled the decision of the Appellate
                                                                      H
    842     SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R .

                                                                .
A   Authority inter alia stating that " ... Merely because a deeming
    provision as contained in the 3rd proviso has to be applied
    regarding the price of the goods sold in the course of wholesale
    trade to a related person, it cannot be contended that there was
    no sale at all to the related person at the factory gate, as
B   alleged by the Revenue. The place of removal, therefore,
    continues to be the assessee's factory. The depot premises
    of the related person from where the goods are sold cannot be
    treated as place of removal for the purpose of Section 4 (4)
    (b). Therefore, the appellant is fully justified in contending that
c   the cost of transportation from the place of removal, namely,
    factory to the place of delivery shall be excluded from the price
    to arrive at the assessabl~ value in terms of Section 4 (2)."

        7. Thus aggrieved, the Revenue appealed before this
    Court under Section 35-L (b) of the Act.
D
         8. It is an admitted fact here that Mis. Frito-Lay is "related
    person" of the M/s. Pepsi Foods Ltd. (Snacks Foods Division).
    The expression "related person" has been specifically defined
    in Section 4 (4) (c):
E
          "4. Valuation of excisable goods for purposes of charging
          of duty of excise.-(1) ...

          (2) .. .

F         (3) .. .

          (4) For the purposes of this section, -

                     (a) .. .

G                    (b) .. .

          (c) "related person" means a person who is so associated
          with the assessee that they have interest, directly or
          indirectly, in the business of each other and includes a
          holding company, a subsidiary company, a relative and a
H
COMMNR. OF CENTRAL EXCISE, CHANDIGARH v.                      843
PEPSI FOODS LTD. [ASOK KUMAR GANGULY, J.]
     distributor of the assessee, and any sub-distributor of such    A
     distributor.

     Explanation.- In this clause "holding company", "subsidiary
     company" and "relative" have the same meanings as in
     the Companies Act, 1956 (1 of 1956).
                                                                     B
     9. The transaction between M/s. Pepsi Foods Ltd. and M/
s. Frito-Lay India has to be understood as one where sale price
cannot be known. In situations where the assessee sold its
goods to a related person, it was prudent to understand that
the price in such a sale would be deliberately understated so        C
as to evade taxation within the scheme of the Act. It was to
dissuade such sales that the legislature had decided to deem
the price of the goods at the time of their sale by the related
persons to wholesale market. The 'normal price' is.mentioned
in Section 4 (1) (a) of the Act. The provision of Section 4(1 )(a)   D
is as follows:

     "4. Valuation of excisable goods for purposes of charging
     of duty of excise.-(1) Where under this Act, the duty of
     excise is chargeable on any excisable goods with                E
     reference to value, such value shall, subject to the other
     provisions of this section, be deemed to be-

     (a) the normal price thereof, that is to say, the price at
     which such goods are ordinarily sold by the assessee to
     a buyer in the course of wholesale trade for delivery at the    F
     time and place of removal, where the buyer is not a related
     person and the price is the sole consideration for the sale:

           Provided that-

          (i) where, in accordance with the normal practice of       G
    the wholesale trade in such goods, such goods are sold
    by the assessee at different prices to different classes of
    buyers (not being related persons) each such price shall,
    subject to the existence of the other circumstances
                                                                     H
                                             r
    844     SUPREME COURT REPORTS [2010) 14 (ADDL.) S.C.R.


A         specified in clause (a), be deemed to be the normal price
          of such goods in relation to each such class of buyers;

                 (ii) where such goods are sold by the assessee in
          the course of wholesale trade for delivery at the time and
          place of removal at a price fixed under any law for the time
B
          being in force or at a price, being the maximum, fixed
          under any such law, then, notwithstanding anything
          contained in clause (iii) of this proviso, the price or the
          maximum price, as the case may be, so fixed, shall, in
          relation to the goods so sold, be deemed to be the normal
c         price thereof;

                (iii) where the assessee so arranges that the goods
          are generally not sold by him in the course of wholesale
          trade except to or through a related person, the normal
D         price of the goods sold by the assessee to or through such
          related person shall be deemed to be the price at which
          they are ordinarily sold by the related person in the course
          of wholesale trade at the time of removal, to dealers (not
          being related persons) or where such goods are not sold
E         to such dealers, to dealers (being related persons) who
          sell such goods in retail;

          10. In these appeals the Revenue contends that in a sale
  of excisable goods between an assessee and a related person
  under Section 4 (1) (a) (iii) of the Act (as it was prior to its
F amendment in 2000) the 'normal price' for the sale is deemed
  to be the one at which the goods are ordinarily sold by the
  'related person' to the whole sellers. Therefore, the place of
  removal for such goods should be the depot of the related
  person from where the goods are sold to the whole sellers,
G instead of the factory gate of the assessee. The Revenue
  contends that an obvious corollary to this is that the freight
  charges so arising between the factory gate of the assessee
  and the place of removal at the depot of the related person
  should constitute the value of the goods for the purposes of
H
 COMMNR. OF CENTRAL EXCISE, CHANDIGARH v. 845
 PEPSI FOODS LTD. [ASOK KUMAR GANGULY, J.]

computation of excise duty. It further contends that since, the      A
'place of removal' is not the assessee's factory gate but rather
the depot of the related person, the price is known, only at the
price at which goods are sold to whole sellers by the related
person.
                                                                     B
     11. Opposing the same, the learned counsel for the
respondent contended that Mis. Frito Lay India is not a
subsidiary of the respondent. The brand names of the products
are held by Pepsi Co. Inc. USA. Respondent's case is that 96%
of the products manufactured by it are sold to M/s. Frito Lay
India and only 4% to independent whole sellers. Originally the       C
assessable value of the items manufactured by the respondent
was arrived at on the basis of price at which the respondent
sold them to M/s. Frito Lay India by taking into account the costs
of raw materials, packing materials, conversions and the profit
margin. Their further case is that Pepsi Co. Inc. USA is a           D
holding company and the respondent and M/s. Frito Lay India
are neither holding companies nor subsidiary companies inter
se. The respondent wants the assessment to be made at the
price at which M/s. Frito Lay India sold the products to its
wholesale dealers. That is why they claim deduction towards          E
freight and transportation charges from the factory gate of the
respondent to the depot of M/s. Frito Lay India. The learned
counsel for the respondent also submitted that the transaction
between respondent and M/s. Frito Lay India was on a jobwork
basis and that the assessment of value should be guided by           F
the principles laid down in the case of Ujagar Prints etc. etc.
v. Union of India & Ors. reported in AIR 1989 SC 972.

     12. The learned counsel for the appellant submits that the
instant case is covered by the three judge Bench decision of         G
this Court in Commissioner of Central Excise, Belgaum v.
Akay Cosmetics (P) Ltd. [(2005) 3 SCC 764]. It appears that
in the instant case the period in question is between 1st
November 1997 and 28th February 1999. Almost the same
period was considered by this Court in its decision in Akay
                                                                     H
    846 SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


A Cosmetics (supra). In the present case it is not disputed by the
  respondent that Mis. Frito Lay India is its related person under
  Section 4(4)(c). The facts discussed in Akay Cosmetics (supra)
  substantially resemble the facts of this case, except of course
  the difference in the items manufactured. In para 25 of Akay
B Cosmetics (supra) (page 774 of the report) this Court
  formulated the key question, which is: "how and when the
  assessable value of the manufactured product is to be
  determined?"

        13. Having posed that question, the learned judges
C answered the same in para 28, (page 777 of the report) inter
  alia, holding as follows:

        "Under section 4 (2), it was provided that where the price
        of the excisable product for delivery at the place of removal
D       was not known and the value was determined with
        reference to the price for delivery at a place other than the
        place of removal, the cost of transportation from the place
        of removal to the place of delivery had to be excluded from
        such a price. The reason is important. Section 4 (2) is a
E       residuary section and applied only to cases where the
        price at the place of removal was not known and the
        taxable value of the excisable product had to be
        determined with reference to the price for delivery (sale)
        at a place other than the price of removal. Under Section
F       4 (2), the cost of transportation from the place of removal
        to the place of delivery was deductible, provided that the
        assessable value (taxable value) was not known at the
        factory gate and had to be determined with reference to
        another place. If the goods were manufactured at place "X"
        but the assessable value was determined with reference
G       to place "Y", the cost of transportation had to be deducted."

          14. In coming to the said conclusion, the learned judges
    relied on this Court's decision in Union of India and others v.
    Bombay Tyre International Limited and others, (1984) 1 SCC
H
COMMNR. OF CENTRAL EXCISE, CHANDIGARH v.                       847
PEPSI FOODS LTD. [ASOK KUMAR GANGULY, J.]
467. In para 31 of Akay Cosmetics (supra), the learned judges          A ·
summed up the essence of the question by saying, inter alia,
"therefore the article became an object of assessment when it
was sold by the manufacturer."

      15. It is not in dispute in the instant case Section 4(2) does
                                                                       B
not apply. What applies is the provision of Section 4(1)(a)(iii)
as it stood at the relevant time. The rationale of the proviso (iii)
was explained in Akay Cosmetics (supra) as follows:

     "... The implication of the manufacturer, the assessee and
     the buyer being related to each other was that the price          C
     charged to the related person was presumed to be
     understated and to dissuade such sales, the legislature
     had introduced the said proviso as anti-evasion measure.
     Hence, to give deductions to the assessee as claimed,
     would defeat the very object of the third proviso. Under all      D
     three provisos, the manufacturer remained the assessee,
     the "object" of the assessment remained the same and
     neither the identity of the manufacturer nor the identity of
     the excisable goods underwent any change. Even the place
     of removal remained unchanged, under the third proviso,           E
     the basis of assessable value alone changed when the
     price of the related person was adopted as the basis of
     the valuation. Therefore, proviso (iii) did not break the
     nexus between price and value under Section 4 (1) (a) of
     the Act." (Para 33, page 779 of the report)
                                                                       F
      16. The learned counsel for the respondent tried to
distinguish the present case from the ratio of Akay Cosmetics
(supra) by relying on the facts in that case by referring to paras
2 and 7 of the judgment in Akay Cosmetics (supra). The
learned counsel submitted that in Akay Cosmetics (supra),              G
freight charges claimed was the one between the depot of the
related person to the place of the unrelated dealer. Obviously
there are some factual differences that are noted in para 2 of
the said judgment, but that does not impinge upon the ratio on
                                                                       H
    848     SUPREME COURT REPORTS (2010] 14 (ADDL.) S.C.R.


A   the interpretation of Section 4(1 )(a)(iii) of the Act which is
    quoted above.

        17. Therefore, the finding of the Customs, Excise and Gold
  (Control) Appellate Tribunal, Bench-A, New Delhi, which is
  quoted above and which upholds the contention of the
8 respondent that it is justified in claiming exclusion of freight
  charges arising between the factory gate of the respondent to
  the depot of the related person, cannot be sustained. This Court
  finds that in the facts and circumstances of this case, Section
  4 (2) is not applicable. This Court, therefore, affirms the order-
C in-original but with a rider.

         18. In the instant case in the order-in-original a penalty has
    been imposed which is equal to the amount of duty. Such
    penalty has been imposed in exercise of power under Section
o   11 AC of the Act. Section 11 AC of the Act as it stood at-the
    relevant point of time runs as under:

          "11AC. Where any duty of excise has not been levied or
          paid or has been short-levied or short-paid or erroneously
          refunded by reasons of fraud, collusion or any wilful mis-
E         statement or suppression of facts, or contravention of any
          of the provisions of this Act or of the rules made
          thereunder with intent to evade payment of duty, the person
          who is liable to pay duty as determined under sub-section
          (2) of section 11A, shall also be liable to pay a penalty
F         equal to the duty so determined:

                Provided that where the duty determined to be
          payable is reduced or increased by the Commissioner
          (Appeals), the Appellate Tribunal or, as the case may be,
G         the court, then, for the purposes of this section, the duty
          as reduced or increased, as the case may be, shall be
          taken into account."

        19. From a perusal of the aforesaid section, especially the
    underlined portion, it is clear that in order to attract the penalty
H
 COMMNR. OF CENTRAL EXCISE, CHANDIGARH v. 849
 PEPSI FOODS LTD. [ASOK KUMAR GANGULY, J.]
provision under Section 11 AC, criminal intent or 'mens rea' is     A
a necessary constituent. In the reply to the show cause notice
the stand which has been taken by the respondent is that it has
been paying the duty and there is no malafide intention on its
part to evade the payment of duty. The furt:1er stand is that the
goods were cleared from the factory only on payment of duty.        B
This stand which has been taken in the reply to the show cause
notices was not found to be incorrect in the order-in-original.
As such the imposition of penalty of the equal amount of duty
under the order-in-original cannot be sustained.

     20. It is well settled that when the statutes create an        C
offence and an ingredient of the offence is a deliberate attempt
to evade duty either by fraud or misrepresentation, the statute
requires 'mens rea' as a·. necessary constituent of such an
offence. But when factually no fraud or suppression or mis-
statement is alleged by the revenue against the respondent in       D
the show cause notice the imposition of penalty under Section
11 AC is wholly impermissible.
     21. The Court in this connection may remind itself of the
fundamental principle "that an accused person cannot be             E
convicted without proof of mens rea, unless from a
consideration of the terms of the statute and other relevant
circumstances it clearly appears that that must have been the
intention of Parliament." [See the decision of the House of
Lords in Vane v. Yiannopoullos, (1964) 3 All ER 8/0, and the        F
opinion of Lord Reid at page 823].

     22. In Vane (supra), the word 'knowingly' was used in the
statute as a condition of creating liability.

     23. The aforesaid dictum of Lord Reid has been followed        G
by this Court also. A reference in this connection may be made
to the decision in Union of India v. Rajasthan Spinning &
Weaving Mills reported in 2009 (238) E.L.T. 3 (S.C.). This
Court considering Section 11 AC of the Act held in para 19 at
page 12 of the report as follows:                                   H
    850    SUPREME COURT REPORTS [2010] 14 (ADDL.) S.C.R.


A        "19. From the aforesaid discussion it is clear that penalty
    under Section 11AC, as the word suggests, is punishment for
    an act of deliberate deception by the assessee with the intent
    to evade duty by adopting any of the means mentioned in the
    section."
B
        24. Following the aforesaid well settled principles, this
  Court quashes that part of tbe order-in-original which imposes
  penalty without any finding of fraud or mis-statement against the
  respondent. This part of the order-in-original is quashed. Save
C as aforesaid, the order-in-original is upheld. These appeals
  filed by the revenue are allowed to the extent indicated above.
  No costs.

    N.J.                                   Appeals partly allowed.