Penalty reduction for brief duty-payment delay where circumstances justified a lenient approach under Section 11AC.

Short delay of one or two days in payment of duty justified a lenient approach to penalty under Section 11AC, as the Tribunal considered the circumstances sufficient to treat the original penalty as excessive. The penalty was accordingly reduced, with relief granted to the assessee.

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Issues: Whether the penalty imposed under Section 11AC required reduction having regard to the short delay in payment of duty and the circumstances of the case.

Analysis: The Tribunal noted that the delay in payment of duty was only by one or two days and considered that the circumstances justified a more lenient approach on the question of penalty. On that basis, it found that the quantum of penalty was excessive and warranted interference.

Conclusion: The penalty was reduced from Rs. 17,06,632 to Rs. 1 lakh, in favour of the assessee.

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