Penalty not sustainable after duty paid before show cause notice, with tribunal bound by settled precedent.

Penalty under central excise law was not exigible where the duty demand had already been discharged before issuance of the show cause notice. The Tribunal applied binding precedent holding that payment before notice negatives the basis for penalty, and it reiterated that a subordinate tribunal must follow Supreme Court and jurisdictional High Court decisions and cannot take a contrary view by distinguishing settled law. On that reasoning, the penalty orders were unsustainable.

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Issues: Whether penalty was sustainable where the duty demand had been discharged before issuance of the show cause notice.

Analysis: The dispute concerned imposition of penalty under the central excise law notwithstanding payment of the demanded duty before the show cause notice. The Tribunal held that the matter stood covered by binding judicial precedent, including the view that once duty is paid before notice, penalty is not warranted. It further held that a subordinate tribunal is bound by the decisions of the Supreme Court and the jurisdictional High Court, and cannot take a contrary view by attempting to distinguish settled law.

Conclusion: Penalty was not exigible in the facts of the case and the orders imposing penalty were unsustainable.

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