Delayed duty payment attracts penalty, but the penalty amount must remain proportionate to the nature of the default.

Delayed payment of central excise duty was treated as non-compliance with the statutory duty-payment requirement and attracted penalty under Rule 25 of the Central Excise Rules, 2002. However, because the duty was paid in due course, the adjudication penalty was considered excessive on the facts. The penalty was therefore upheld in principle but reduced to a lower amount, reflecting the need for proportionality between the default and the punishment. The Revenue's appeal succeeded only to the extent of sustaining the penalty while obtaining modification of its quantum.

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Issues: Whether penalty was leviable for delayed payment of central excise duty and, if so, whether the quantum of penalty required reduction.

Analysis: The delayed payment amounted to non-compliance with the statutory duty-payment requirement and attracted penalty under Rule 25 of the Central Excise Rules, 2002. However, as the duty had been paid in due course, the penalty imposed in adjudication was found to be excessive in the facts of the case.

Conclusion: Penalty was upheld in principle, but its amount was reduced from Rs. 10,000 to Rs. 1,000.

Final Conclusion: The Revenue's appeal succeeded only to the extent of sustaining penalty while securing modification of the quantum.

Ratio Decidendi: Delayed payment of duty can attract penalty under Rule 25, but the amount of penalty must be proportionate to the nature of the default and surrounding circumstances.

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