Penalty discretion under Central Excise law upheld where no arbitrariness was shown in the exercise of power.

Discretion to interfere with penalty under Section 76 read with Section 80 of the Central Excise Act was recognised as permissible, but judicial interference was not justified where that discretion was exercised without arbitrariness. On the facts stated, the court found no basis to disturb the penalty order and declined interference, thereby upholding the exercise of discretion.

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Issues: Whether the authority had discretion to interfere with the penalty imposed under Section 76 read with Section 80 of the Central Excise Act, and whether the High Court should interfere with the exercise of that discretion.

Analysis: The exercise of discretion in relation to penalty under Section 76, read with Section 80, was held to be permissible. Where such discretion has been exercised and no arbitrariness is shown, interference by the court is not warranted.

Conclusion: The High Court declined to interfere with the penalty order and upheld the exercise of discretion.

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