Penalty under the special excise scheme was unsustainable as binding precedent followed the Supreme Court's ruling.

Penalty under Rule 96ZP(3) of the Central Excise Rules, 1944 was held unsustainable because the matter was governed by the Court's earlier precedent, which had applied the Supreme Court's ruling striking down the penalty component of the special excise scheme. On that binding basis, the Tribunal's interference with the penalty was justified and the Revenue's substantial questions were answered against it. The challenge therefore failed.

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Issues: Whether the Tribunal was justified in interfering with the penalty imposed under Rule 96ZP(3) of the Central Excise Rules, 1944.

Analysis: The appeal was governed by the earlier decision of the same Court, which had held that penalty under the relevant rule could not be sustained in view of the Supreme Court's ruling striking down the penalty component under the special excise scheme. Following that binding precedent, the substantial questions raised by the Revenue were answered against it.

Conclusion: The penalty could not be sustained and the Revenue's challenge failed.

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