Penalty for delayed duty payment under Rule 96ZO sustained, with the amount reduced after considering the short delay and payment of interest.

Penalty for delayed payment of duty under Rule 96ZO was upheld where the delay was admitted and duty was paid with interest after a short lapse. The relevant factors for penalty assessment were the length of delay, the amount of duty involved and the reasons for the delay. On the facts, the delay still attracted liability to penalty, but the quantum was reduced to Rs. 1 lakh.

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Issues: Whether penalty imposed for delayed payment of duty under Rule 96ZO of the Central Excise Rules was justified and, if so, whether the quantum of penalty required reduction.

Analysis: The duty was paid after a delay of 15 days, and the delay was admitted. The relevant consideration for penalty under Rule 96ZO is the length of delay, the amount of duty involved, and the reasons for the delay. In the facts of the case, the duty was paid along with interest after the short delay, but the lapse still attracted liability to penalty.

Conclusion: The penalty was sustainable, but its amount was reduced to Rs. 1 lakh.

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