Compounded levy delay penalty and interest apply when duty is paid late under a fixed statutory timetable.

Under the compounded levy scheme and the fourth proviso to Rule 96ZP(3), delayed payment of duty attracts the statutory consequences for non-compliance with the fixed payment timeline. CESTAT, Mumbai-AT held that penalty and interest could not be waived merely because the duty was paid later, since the scheme imposed a time-bound obligation rather than a case of voluntary pre-notice payment. The earlier Larger Bench view on waiver of penalty and interest was found inapplicable on these facts, and the revenue's entitlement to penalty and interest was restored.

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Issues: Whether, under the compounded levy scheme and the fourth proviso to Rule 96ZP(3) of the Central Excise Rules, penalty and interest could be set aside for delayed payment of duty.

Analysis: The order held that where the scheme fixes a specific time for payment of duty, delay attracts the consequences prescribed under the rule. The decision relied on the distinction between cases involving voluntary payment before notice and cases governed by a time-bound statutory payment obligation, and held that the earlier Larger Bench view on waiver of penalty and interest was not applicable to such cases.

Conclusion: Penalty and interest could not be set aside for delayed payment of duty under the compounded levy scheme.

Final Conclusion: The appeal succeeded and the relief granted by the lower appellate authority was set aside, restoring the revenue's entitlement to penalty and interest.

Ratio Decidendi: Where a statutory scheme prescribes a fixed time for payment of duty, delay in payment attracts the consequences provided by the rule and waiver of penalty and interest is not available merely because duty was subsequently paid.

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