Penalty under Rule 25 is discretionary within the maximum limit, and a reduced penalty was upheld for lack of challenge to reasons.

Rule 25 of the Central Excise Rules, 2001 was read as prescribing only an upper ceiling on penalty, not as requiring imposition of the maximum penalty in every case. The Commissioner (Appeals) had recorded reasons for reducing the penalty, and those reasons were not challenged by the Revenue. On that basis, no ground was found to interfere with the appellate order, and the reduced penalty was upheld in favour of the assessee.

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Issues: Whether the penalty under Rule 25 of the Central Excise Rules, 2001 is mandatory or only a maximum limit, and whether the reduced penalty required interference.

Analysis: The rule was read as prescribing an upper ceiling on penalty, not as compelling the authority to impose the maximum amount in every case. The Commissioner (Appeals) had given reasons for reducing the penalty, and the Revenue did not challenge those reasons. In these circumstances, no ground was made out to interfere with the appellate order.

Conclusion: The penalty under Rule 25 was held to be discretionary within the prescribed maximum, and the reduction of penalty was upheld in favour of the assessee.

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