Mandatory penalty under Rule 25(1) rejected as the reduced excise penalty was upheld on the facts.

Rule 25(1) of the Central Excise Rules, 2002 did not prescribe a minimum mandatory penalty of Rs. 10,000 for delayed filing of returns. The Tribunal noted that the Larger Bench had already rejected that interpretation and found, on the facts, no legal basis to interfere with the reduced penalty imposed by the original authority. The departmental challenge therefore failed, and the penalty of Rs. 500 was not shown to be illegal or inadequate in law.

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Issues: Whether penalty of Rs. 10,000 was the minimum mandatory penalty under Rule 25(1) of the Central Excise Rules, 2002 for delayed filing of the return.

Analysis: The appeal raised only the contention that Rule 25(1) prescribed a minimum penalty of Rs. 10,000. The Tribunal noted that this contention had already been negatived by the Larger Bench and that, on the facts, imposition of a higher penalty was not warranted. The penalty of Rs. 500 imposed by the original authority was therefore not shown to be illegal or inadequate in law.

Conclusion: The Tribunal held that Rs. 10,000 was not the minimum mandatory penalty under Rule 25(1), and the departmental challenge to the reduced penalty failed.

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