Mandatory excise penalty co-extensive with duty cannot be reduced once the law is settled.

Penalty under Rule 96ZQ(5)(ii) was treated as mandatory and co-extensive with the duty liability, following the settled position that the statutory penalty cannot be reduced below the duty amount. On that basis, the Court held that remand would serve no useful purpose once the governing law was already clear. The orders reducing the penalty were set aside and the original penalty order restored, leaving the penalty aligned with the duty demand.

---

---

Issues: Whether penalty under Rule 96ZQ(5)(ii) was mandatory and co-extensive with the duty demanded, and whether the matter required remand for reconsideration.

Analysis: The appeal arose from successive orders reducing the penalty imposed under Rule 96ZQ(5)(ii). The Court noted that the Supreme Court had already held, in the context of Section 11AC and Rule 96ZQ, that penalty is mandatory and must be co-extensive with the duty liability. In view of that settled position, no useful purpose would be served by sending the matter back for fresh consideration. The original duty liability was Rs. 4.50 lakh, and the penalty had to match that amount.

Conclusion: The penalty under Rule 96ZQ(5)(ii) was mandatory and co-extensive with the duty, and remand was unnecessary. The orders reducing the penalty were set aside and the original penalty order was restored, in favour of the Revenue.

Final Conclusion: The decision reaffirmed that, for the relevant excise penalty regime, the statutory penalty followed the duty liability and appellate interference reducing it was unsustainable once the governing law was settled.

Ratio Decidendi: Where penalty is statutorily mandatory and declared to be co-extensive with duty, appellate authorities cannot reduce it below the duty amount, and remand serves no purpose once the legal position is settled.

---