Rule 96ZP(3) penalty turns on delayed duty payment, and discretionary reduction by the Tribunal raised no substantial question of law.

Penalty under Rule 96ZP(3) of the Central Excise Rules is attracted by failure to pay duty within the prescribed time and is not dependent on when the show cause notice is issued. The High Court, applying binding precedent, held that the Tribunal's reduction of penalty was a discretionary exercise and found no legal infirmity or irregularity in that approach. On that basis, no substantial question of law arose from the reduction, and the appellate challenge failed.

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Issues: Whether penalty under Rule 96ZP(3) of the Central Excise Rules depended on the timing of the show cause notice, and whether any substantial question of law arose from the Tribunal's reduction of penalty.

Analysis: The appeal was considered in the light of binding precedent holding that the penalty contemplated by the rule is attracted by failure to pay duty within the prescribed time and is not controlled by when the show cause notice is issued. The Tribunal's reduction of penalty was treated as an exercise of discretion, and no legal infirmity or irregularity in that approach was found.

Conclusion: The issue was answered against the Revenue and the assessee succeeded.

Final Conclusion: The appellate challenge failed, and the Tribunal's order was left undisturbed.

Ratio Decidendi: Penalty under Rule 96ZP(3) is not dependent on the timing of the show cause notice, and a discretionary reduction of penalty by the Tribunal does not by itself give rise to a substantial question of law.

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