Bona fide clerical error in duty payment cannot justify penalty absent wilful default or intent to evade duty.

Penalty for short payment of central excise duty was held unsustainable where the default arose from a bona fide clerical error in the personal ledger account, the duty was made good on detection, and there was no evidence of wilful or deliberate conduct. The lapse was treated as a technical infringement rather than a substantive violation, so penal consequences were not justified. Relief was granted by deleting the penalty, with a caution to exercise greater care in future.

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Issues: Whether the penalty imposed for overdrawal from the personal ledger account and short payment of duty, arising from a clerical error and corrected on detection, warranted interference.

Analysis: The short payment was made good once the mistake was noticed, and the amount involved was small. The default was found to be the result of a clerical error and not of any wilful or deliberate conduct. In the absence of evidence showing a contrary intent, the lapse was treated as a technical infringement rather than a substantive violation justifying penalty.

Conclusion: The penalty was not sustainable and was set aside in favour of the assessee.

Final Conclusion: Relief was granted by deleting the penalty, with a caution to be careful in future.

Ratio Decidendi: A penalty is not warranted where the duty shortfall arises from a bona fide clerical error, is rectified on detection, and the conduct amounts only to a technical breach without proof of wilful default or intent to evade duty.

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