Bona fide clerical error in duty cheque delay did not justify penalty where duty and interest were promptly paid.

Penalty under Rule 96ZQ(5) was considered inappropriate where duty payment was delayed by one day because of a bona fide clerical mistake in the cheque, even though the amount in figures was correct. The duty was paid immediately in cash after the error was discovered, and interest for the delayed day was also discharged. On these facts, the provision was not applied mechanically, and penalty equal to the duty amount was found unwarranted. The approach emphasised that prompt rectification of a brief, genuine error does not justify penal action for delayed payment.

---

---

Issues: Whether penalty under Rule 96ZQ(5) of the Central Excise Rules, 1944 was leviable for a one-day delay in payment of duty caused by a clerical mistake in the cheque despite immediate subsequent payment of duty and interest.

Analysis: The duty liability was sought to be discharged before the end of the month by cheque, but the cheque was returned because the amount in words contained a clerical mistake although the amount in figures was correct. The duty was thereafter paid in cash immediately on discovery of the error, and interest for the delayed day was also paid. On these facts, the delay was only of one day and arose from a genuine clerical error rather than any deliberate default. In such circumstances, imposition of a penalty equal to the duty amount was held to be unwarranted.

Conclusion: Penalty under Rule 96ZQ(5) was not leviable; the finding was in favour of the assessee.

Ratio Decidendi: A penal provision for delayed duty payment should not be applied mechanically where the default is confined to a brief, bona fide clerical mistake promptly rectified by payment of duty and interest.

---