Statutory relief for prevalent non-levy practice barred the duty demand and also invalidated the associated penalty.

Notification No. 54/89 issued under Section 11C gave statutory relief where a generally prevalent practice of non-levy of duty had existed, so the duty for the relevant period was not required to be paid. On that basis, the confirmed duty demand ceased to survive and was no longer enforceable. As the demand itself could not stand after the notification, the penalty imposed on the appellants also could not be sustained and was liable to be set aside.

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Issues: Whether the duty demand and penalty could survive after issuance of Notification No. 54/89 under Section 11C of the Central Excises and Salt Act, 1944.

Analysis: The notification declared that where a generally prevalent practice had existed regarding non-levy of duty, the duty would not be required to be paid for the relevant period. In view of this statutory relief, the demand confirmed against the appellants ceased to survive. As the demand itself was no longer enforceable, the penalty imposed on the appellants also could not stand.

Conclusion: The duty demand was not enforceable and the penalty was liable to be set aside.

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