Penalty for delayed central excise duty payment upheld in principle but substantially reduced for excessiveness

Penalty for delayed payment of central excise duty under Rule 96ZQ(3) was found justified because repeated delays established breach of the prescribed rule, so the plea for complete waiver was rejected. However, the penalty was considered excessive in the circumstances and was substantially reduced to Rs. 30,000, reflecting proportionality in the sanction while sustaining the contravention finding.

---

---

Issues: Whether penalty for delayed payment of central excise duty under Rule 96ZQ(3) of the Central Excise Rules, 1944 was liable to be sustained in full or reduced.

Analysis: The default consisted of repeated delay in payment of duty for two periods, and the contravention of the prescribed rule was established. The plea for total waiver of penalty on the basis of cited precedent was not accepted. At the same time, the quantum of penalty was found to be excessive having regard to the amount involved and the circumstances of the case.

Conclusion: The penalty was upheld in principle but substantially reduced to Rs. 30,000.

---