Compounded levy interest and equal penalty are mandatory on delayed duty payment where the statute gives no waiver power.

Under the compounded levy regime, delayed payment of duty attracted mandatory interest and an equal penalty where the governing provision expressly so required. The CESTAT held that, once duty remained unpaid within time and was later discharged, the adjudicating authority had no statutory discretion to waive or reduce either component. Relying on the mandatory nature of the compounded levy provision and the cited precedent, the order confirming interest and penalty was sustained and the challenge failed.

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Issues: Whether, under the compounded levy scheme, interest and equal penalty under Rule 96ZP(3) were mandatory on delayed payment of duty and whether the authority had any discretion to waive or reduce them.

Analysis: The liability arose under Section 3A of the Central Excise Act, 1944 in a compounded levy regime. On the admitted facts, duty remained unpaid within time and was later discharged. The governing provision required payment of outstanding duty with interest and a penalty equal to the duty outstanding, and the provision was treated as mandatory. In the absence of any statutory discretion, the adjudicating authority had no power to reduce or waive either interest or penalty. The reasoning was supported by the cited precedent holding the corresponding compounded levy provisions to be mandatory.

Conclusion: The levy of interest and equal penalty was valid and not open to waiver or reduction; the challenge failed.

Final Conclusion: The order confirming interest and penalty was sustained and the appeal was dismissed.

Ratio Decidendi: Where the compounded levy provision expressly mandates interest and equal penalty for delayed payment, the authority has no discretion to waive or reduce them.

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