Penalty enhancement requires grounds where adjudicating discretion is already exercised leniently and duty has been paid during adjudication.

The Revenue could not seek enhancement of the penalty because the adjudicating authority had already exercised discretion leniently after noting that duty had been paid during the pendency of adjudication. No grounds were shown to justify a higher penalty, and the quantum of penalty remained within the adjudicating authority's discretion. The appeal was rejected.

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Issues: Whether the Revenue was entitled to seek enhancement of the penalty imposed on the assessee.

Analysis: The adjudicating authority had imposed penalty after taking a lenient view on the basis that the duty had already been paid during the pendency of adjudication. No grounds were shown for enhancement of the penalty, and the quantum of penalty lay within the discretion of the adjudicating authority.

Conclusion: The Revenue was not entitled to enhancement of the penalty, and the appeal was rejected.

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