Factual discretion in excise relief upheld where evidence supported reduced fine, deleted shortage demand, and penalty reduction.

Reduction of redemption fine, deletion of duty demand on alleged shortage of goods, and reduction of penalty were sustained because the Tribunal's findings rested on evidence and factual discretion. The Tribunal considered timely duty payment, production of invoices, and available Cenvat credit and PLA balances while reducing the redemption fine, and found no material showing clandestine removal or suppression to support the shortage-based demand. The penalty reduction was also upheld, as the applicable penalty provisions were distinct and the Department had not effectively challenged the substantial penalty before the Tribunal. In the absence of any substantial question of law, appellate interference was not warranted.

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Issues: (i) Whether reduction of redemption fine by the Tribunal was perverse; (ii) whether deletion of duty demand on shortage of goods was sustainable; (iii) whether reduction of penalty was liable to be interfered with.

Issue (i): Whether reduction of redemption fine by the Tribunal was perverse.

Analysis: The appeal under Section 35G of the Central Excise Act, 1944 was required to disclose a substantial question of law. On merits, the Tribunal had considered relevant mitigating circumstances, including payment of duty within the prescribed time, production of invoices before the officers, and availability of sufficient Cenvat credit and PLA balances. The reduction in redemption fine was thus a matter of judicial discretion based on the facts found.

Conclusion: The reduction of redemption fine was upheld and no perversity was found.

Issue (ii): Whether deletion of duty demand on shortage of goods was sustainable.

Analysis: The Tribunal had found as a fact that no panchnama was prepared when the officers visited the factory and that there was no evidence of clandestine removal of the goods allegedly found short. In the absence of evidence supporting suppression or removal, the duty demand could not be sustained.

Conclusion: The deletion of the duty demand on shortage of goods was upheld.

Issue (iii): Whether reduction of penalty was liable to be interfered with.

Analysis: The penalty under Rule 173Q of the Central Excise Rules, 1944 was distinct from the penalty under Section 11AC of the Central Excise Act, 1944. The substantial penalty had not been challenged by the Department before the Tribunal, and the Tribunal also noted that the duty had been paid within time and part of the demand was not sustainable.

Conclusion: The reduction of penalty was upheld.

Final Conclusion: No substantial question of law arose for consideration, and the appellate challenge to the Tribunal's reliefs failed in full.

Ratio Decidendi: Where the Tribunal's findings on redemption fine, shortage of goods, and penalty are supported by evidence and rest on factual discretion, interference under Section 35G of the Central Excise Act, 1944 is not warranted in the absence of a substantial question of law.

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