Ultra vires penalty under Rule 96ZQ(5) was not enforceable, and the Revenue could not seek enhancement.

Rule 96ZQ(5) could not sustain a penalty for delayed payment of duty after the Madras High Court declared the provision ultra vires. The Tribunal followed later authorities applying that ruling, held that the Revenue's reliance on an earlier contrary decision did not assist it, and treated the penalty as not legally enforceable. On that basis, the restricted penalty was not enhanced and the Revenue's challenge failed.

---

---

Issues: Whether the penalty imposed under Rule 96ZQ(5) could be enhanced in view of the Revenue's challenge, and whether the Rule could be enforced in light of the High Court's declaration that it was ultra vires.

Analysis: The appeal turned on the effect of prior decisions dealing with Rule 96ZQ and the validity of notifications and penalties imposed under that provision. The Tribunal preferred the line of authority holding that the Rule had been declared ultra vires by the Madras High Court and that penalty for delayed payment of duty was therefore not sustainable. In that view, the earlier decision relied on by the Revenue did not assist it, and the later decisions following the High Court ruling were treated as governing the issue.

Conclusion: The challenge to the restricted penalty failed, and the Revenue was not entitled to enhancement.

---