Discretion to reduce central excise penalty under Section 80 prevails over mandatory penalty under Section 76 when statutory conditions are met

Section 76 of the Central Excise Act, 1944 prescribes penalty for the relevant default, but Section 80 gives the authority discretion to waive or reduce that penalty when the statutory conditions are satisfied. The existence of Section 80 shows that the penalty under Section 76 is not mandatory in every case without exception. The Bombay High Court therefore rejected the revenue's contention that no discretion existed and recognised the authority's power to impose a lesser penalty where justified.

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Issues: Whether, in proceedings under Section 76 of the Central Excise Act, 1944, the authority was bound to impose the prescribed penalty or could invoke Section 80 to impose a lesser penalty.

Analysis: Section 76 prescribes penalty for the relevant default, but Section 80 confers discretion on the authority to waive or reduce the penalty where the statutory conditions are satisfied. The existence of Section 80 negatives the contention that the penalty under Section 76 is mandatory in every case without exception.

Conclusion: The authority had discretion to impose a lesser penalty, and the revenue's contention that no such discretion existed was rejected.

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