Delayed excise duty payment without intent to evade justifies only nominal penalty, not stringent evasion penalty.

Delayed payment of central excise duty, followed by payment of interest and filing of returns, was treated as a procedural default under Rule 8(3A) of the Central Excise Rules, 2002. Because the facts did not show clandestine removal or an intention to evade duty, the stringent penalty for wilful evasion under Section 11AC of the Central Excise Act, 1944 was considered unwarranted. The penalty was therefore restricted to a nominal penalty under Rule 27 of the Central Excise Rules, 2002 for the procedural violation.

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Issues: Whether penalty under Section 11AC of the Central Excise Act, 1944 was warranted for delayed payment of duty, and whether the penalty could instead be restricted to a lesser penalty under Rule 27 of the Central Excise Rules, 2002.

Analysis: The duty had been paid late along with interest, the returns had been filed, and the delay was attributed to financial . The default attracted the consequence under Rule 8(3A) of the Central Excise Rules, 2002, but the facts did not indicate clandestine removal or an intention to evade duty. In the absence of such culpable intent, the stringent penalty under Section 11AC was held to be unjustified, though a nominal penalty remained warranted for the procedural violation.

Conclusion: Penalty under Section 11AC was set aside and substituted with a penalty of Rs. 5,000/- under Rule 27 of the Central Excise Rules, 2002.

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