Penalty under Customs law cannot add interest to duty when the statute uses "or" in clear disjunctive terms.

Section 114A of the Customs Act, 1962 was interpreted as permitting penalty to be linked to either duty or interest, depending on the statutory situation, because the text uses the disjunctive "or" followed by "as the case may be". The provision was held to be plain and unambiguous, so "or" could not be read as "and" to add interest to duty short-paid for penalty purposes. A departmental circular could not override the clear language of the statute. On that construction, the penalty could not include interest in addition to duty, and the revenue's challenge failed.

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Issues: Whether, for penalty under Section 114A of the Customs Act, 1962, the amount of interest could be added to the duty short-paid so as to make the penalty equal to duty and interest.

Analysis: The provision uses the expression "or" between duty and interest and is followed by the words "as the case may be", indicating two distinct situations. The language is plain and unambiguous, and the statutory text does not permit reading "or" as "and". A departmental circular cannot override the clear words of the enactment.

Conclusion: The penalty under Section 114A cannot include interest in addition to duty. The revenue's challenge failed, and the assessee's position was upheld.

Ratio Decidendi: Where a penalty provision employs the disjunctive expression "or" in a clear statutory setting, it must be given its ordinary meaning and cannot be construed as "and" unless the statute itself compels such a reading.

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