Penalty reduction under Rule 96-Q upheld where duty was paid, interest neutralised advantage, and delay was minimal.

Reduction of penalty under Rule 96-Q(5) was sustained because the Commissioner (Appeals) had already reduced the penalties and that order was not challenged by the revenue. The challenge that the appellate authority lacked discretion to reduce the penalty was therefore rejected. The Tribunal relied on factual findings that the duty had been paid, interest had offset any pecuniary advantage from delayed payment, and the delay was only for a few days; on that basis, it treated the penalties as excessive. No substantial question of law arose from this fact-based interference.

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Issues: Whether the reduction of penalty by the Tribunal gave rise to a substantial question of law, and whether the appellate authorities had discretion to reduce the penalty under Rule 96-Q(5) of the Central Excise Rules, 1944.

Analysis: The penalties had already been reduced by the Commissioner (Appeals), and that order was not challenged by the revenue. In that situation, the contention that the appellate authority had no discretion to reduce the penalty could not be accepted. The Tribunal also acted on the factual findings that the duty had been paid, the interest had neutralised any pecuniary advantage from delayed payment, and the delay was only for a few days; on that basis, the Tribunal found the penalties excessive. No substantial question of law arose from such fact-based interference.

Conclusion: The reduction of penalty was upheld and the proposed questions did not justify interference.

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