Statutory minimum penalty under Central Excise Rules cannot be reduced below the prescribed floor despite later duty payment.

Penalty under Rule 25(1) of the Central Excise Rules cannot be reduced below the prescribed statutory minimum where duty default occurred more than once, even if the duty and interest were later paid. The Tribunal noted that the appellate authority's reduction of penalty to Rs. 5,000 fell below the minimum contemplated by Rule 25(1), which permits a penalty not exceeding the duty involved or Rs. 10,000, whichever is more. The reduction was therefore unsustainable, and enhancement of the penalty to the minimum amount was justified.

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Issues: Whether the penalty imposed under Rule 25(1) of the Central Excise Rules could be reduced below the prescribed minimum amount.

Analysis: The respondent had defaulted in payment of duty on more than one occasion, and the duty with interest had been paid subsequently. The question before the Tribunal was whether the penalty could nevertheless be reduced below the minimum amount contemplated by Rule 25(1), which provides for a penalty not exceeding the duty involved or Rs. 10,000, whichever is more. The reduction made by the appellate authority to Rs. 5,000 was found to be below the statutory minimum and therefore unsustainable.

Conclusion: The penalty could not be reduced below Rs. 10,000 and the enhancement sought by the Revenue was justified.

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