Delayed payment of compounded levy dues attracted mandatory penalty equal to duty, despite change in management.

Delayed payment of compounded levy dues attracted the statutory penalty under Rule 96ZP(3) of the Central Excise Rules, 1944, where the respondents had also failed to pay interest on time. The Tribunal held that change in management did not justify deletion of the penalty, and its earlier contrary view could not prevail against the binding High Court decision upholding imposition of penalty and denying any reduction. Penalty equal to the duty amount was therefore held imposable, and the order deleting the penalty was set aside.

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Issues: Whether penalty equal to the duty amount was imposable for delayed payment of compounded levy dues under Rule 96ZP(3) of the Central Excise Rules, 1944.

Analysis: The respondents had paid the compounded levy amounts after substantial delay, and interest on the delayed payment had also not been paid. The Tribunal noted that the lower appellate authority had deleted the penalty on the ground of change in management, but held that such delay attracted the statutory penalty prescribed under Rule 96ZP(3). The Tribunal further held that its earlier view that no penalty was imposable in compounded levy cases could not be followed in light of the binding High Court decision which upheld the imposition of penalty and stated that the Tribunal could not reduce it.

Conclusion: Penalty equal to the duty amount was held to be imposable, and the order deleting the penalty was set aside.

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