Penalty for delayed duty payment upheld, but reduced after subsequent payment with interest and absence of a stay order.

Penalty was exigible under Rule 96ZO/96ZP where excisable goods were cleared without payment of duty on the due dates, as there was no stay order in favour of the respondents and they were not parties to the proceedings said to have caused confusion. The subsequent payment of duty with interest after the position became clear justified moderation of the penalty, so the penalty was upheld in principle but reduced to Rs. 20,000 on each respondent.

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Issues: Whether penalty was exigible under Rule 96ZO/96ZP where the respondents had cleared goods without paying duty on the due dates, and if so, whether the penalty deserved reduction.

Analysis: The respondents were found to have removed the excisable goods without discharging the duty liability on the due dates. They were not parties to the proceedings said to have created confusion, and there was no stay order in their favour against payment of duty. On these facts, liability to penalty followed. At the same time, the respondents subsequently discharged the duty with interest once the position became clear, which justified moderation of the penalty amount.

Conclusion: Penalty was payable, but the quantum was reduced to Rs. 20,000/- on each respondent.

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