Furnace closure abatement and discretionary penalty under excise rules depend on facts, not automatic statutory minimums.

Delayed intimation of furnace closure did not, on the accepted facts, defeat the assessee's claim for abatement where the unit had closed late on a Saturday and notice was given on the next working day. The penalty provision under Rule 96ZO(3) was treated as discretionary, not mandatory, even where duty under Section 3A was not paid within time. The court accepted that the authority could vary the penalty on the individual facts, and no perversity was shown in the exercise of that discretion.

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Issues: (i) Whether delayed intimation of furnace closure, sent after intervening holidays, disentitled the assessee to abatement for the relevant period; (ii) Whether penalty under Rule 96ZO(3) was mandatory or discretionary where duty payable under Section 3A was not paid within time.

Issue (i): Whether delayed intimation of furnace closure, sent after intervening holidays, disentitled the assessee to abatement for the relevant period.

Analysis: The claim for abatement depended on compliance with the closure intimation requirement under Rule 96ZO(2) of the Central Excise Rules, 1944. On the first period, the explanation that the unit had closed late on a Saturday and the intimation was filed on the next working day was accepted on facts. No independent legal error was shown in that factual acceptance.

Conclusion: The assessee was not denied abatement on this ground, and the issue did not give rise to any substantial question of law.

Issue (ii): Whether penalty under Rule 96ZO(3) was mandatory or discretionary where duty payable under Section 3A was not paid within time.

Analysis: The penalty question arose in the context of duty payable under Section 3A of the Central Excise Act, 1944 and the penal consequence under Rule 96ZO(3) of the Central Excise Rules, 1944. The governing principle applied was that the penalty provision was not rigidly minimum in all cases, but left to the discretion of the authority depending on the individual facts. Since discretion had been exercised on the facts, no perversity was shown.

Conclusion: Penalty under Rule 96ZO(3) was discretionary and not mandatory.

Final Conclusion: The revenue challenge failed because the disputed abatements and the reduced penalty rested on factual determinations, and no substantial question of law arose for interference.

Ratio Decidendi: Where the relevant penalty provision confers discretion, the quantum of penalty depends on the facts of the individual case and is not invariably fixed as the statutory minimum.

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