Penalty under Rule 96ZQ(5)(i) unsustainable where monthly duty was timely paid and differential duty was promptly discharged after recomputation.

Penalty under Rule 96ZQ(5)(i) was not leviable where the assessee had been regularly paying monthly duty within time and the differential duty arose only after the department revised annual capacity and recomputed liability. The assessee paid the additional duty within two days of the final order, so there was no default in timely payment of duty or part thereof under Rule 96ZQ(3). In the absence of an independent failure by the assessee to pay within the prescribed time, the penalty provision had no application and the imposition was unsustainable.

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Issues: Whether penalty was imposable under Rule 96ZQ(5)(i) where the assessee had paid the duty determined by the department and had promptly paid the differential duty on receipt of the final order.

Analysis: Rule 96ZQ(5) attracts penalty only where an independent processor fails to pay duty or part thereof within the time prescribed by Rule 96ZQ(3). The assessee had been regularly paying the monthly duty within time, and there was no allegation to the contrary. The additional duty arose only because the department revised the annual capacity and recalculated the liability. The assessee paid the differential amount within two days of receiving the final order. In these circumstances, the delay did not arise from any default on the part of the assessee, and there was no foundation for invoking the penalty provision.

Conclusion: Penalty under Rule 96ZQ(5)(i) was not leviable and its imposition was unsustainable.

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