Penalty relief under Rule 96ZQ where duty and interest were paid before month-end

Under Rule 96ZQ of the Central Excise Rules, failure to pay duty within the prescribed time exposed the assessee to penalty, but the penalty could be reduced where duty and interest were paid before the end of the month. The Tribunal relied on Rule 96ZQ(5) and treated the delayed payment within the monthly period, together with interest payment, as sufficient ground for relief. On the facts recorded, the penalty was reduced rather than upheld in full.

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Issues: Whether the penalty imposed under Rule 96ZQ of the Central Excise Rules was liable to be reduced or deleted where the duty was paid before the end of the month with interest.

Analysis: The penalty had been imposed for failure to pay duty within the time prescribed under Rule 96ZQ(1). The record showed that the assessee had paid the duty together with interest before the end of the month, and the Tribunal relied on Rule 96ZQ(5) to grant relief. In the facts found, the delayed payment within the monthly period, coupled with payment of interest, was treated as sufficient to sustain the Tribunal's approach of reducing the penalty.

Conclusion: The penalty was rightly reduced, and the assessee succeeded on the issue.

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