Statutory reduced-penalty option applies where the prescribed conditions are met in a Central Excise penalty case.

Where penalty is imposed under the Central Excise Act, the assessee is entitled to the statutory reduced-penalty option if the prescribed conditions are satisfied. The demand of duty and interest was not disputed, and the only grievance concerned denial of the concession to discharge penalty at a reduced percentage within the stipulated period. The commentary states that the assessee was entitled to pay the reduced penalty together with duty and interest within 30 days from communication of the order.

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Issues: Whether the assessee was entitled to the statutory option to pay 25% of the duty as penalty within 30 days in a case where penalty was imposed under Section 11AC of the Central Excise Act, 1944.

Analysis: The demand of duty with interest was not contested. The grievance was confined to the absence of the option to discharge the penalty at 25% of the duty within the prescribed period. The authorities below had imposed penalty under Section 11AC without extending that option.

Conclusion: The assessee was held entitled to pay penalty limited to 25% of the duty, together with duty and interest, within 30 days from communication of the order.

Ratio Decidendi: Where penalty is imposed under Section 11AC of the Central Excise Act, 1944, the assessee is entitled to the statutory option of reduced penalty if the conditions for that concession are otherwise satisfied.

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