Penalty reduction for delayed duty payment upheld where duty and interest were paid and delay was limited

Penalty under Rule 96ZO(3) may be reduced where payment of duty was delayed only for a limited period and the assessee has already paid the duty with interest. The Kerala HC found no reason to interfere with the Tribunal's discretion in reducing the penalty, noting that the reduction followed the approach adopted in similar Supreme Court matters and that interest at 18% for the actual period of delay had also been paid. The challenge to the reduced penalty therefore failed.

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Issues: Whether the penalty under Rule 96ZO(3) could be reduced in cases of delayed payment of duty.

Analysis: The orders under challenge concerned reduction of penalty for delay in payment of duty. The Tribunal had reduced the penalty by following the Supreme Court's approach in similar matters. The delay was only for a limited number of days, the duty had been paid with interest, and interest at 18% for the actual period of delay had also been paid. In these circumstances, the Court found no ground to interfere with the Tribunal's exercise of discretion in reducing the penalty.

Conclusion: The reduction of penalty was upheld and the challenge failed.

Ratio Decidendi: Where delay in payment of duty is limited and duty with interest has been paid, reduction of penalty under Rule 96ZO(3) does not call for interference.

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