Penalty for delayed RT-12 filing and insufficient PLA balance upheld on liability, but reduced for bona fide conduct.

Delayed filing of monthly RT-12 returns and clearances made without sufficient PLA balance were treated as established defaults, and later adjustment of duty did not erase the lapses. The penalty order was therefore sustained on merits and the finding of liability was upheld. However, the absence of mala fide intent, subsequent payment adjustment, and the assessee's financial difficulty were treated as mitigating factors, so the penalty was found excessive and reduced on quantum. The substantive breach remained, but the penalty was brought down on the basis of bona fide conduct and no intention to evade duty.

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Issues: (i) whether the impugned penalty order was sustainable on merits in respect of delayed filing of RT-12 returns and clearances made without sufficient balance in the PLA register; (ii) whether the penalty deserved further reduction on the facts of the case.

Issue (i): whether the impugned penalty order was sustainable on merits in respect of delayed filing of RT-12 returns and clearances made without sufficient balance in the PLA register.

Analysis: The default in not filing monthly RT-12 returns within time and the clearances effected without sufficient PLA balance were not disputed. The adjustment of the payment on a later date did not negate the occurrence of the lapses.

Conclusion: The penalty order was sustainable on merits and the finding against the assessee was upheld.

Issue (ii): whether the penalty deserved further reduction on the facts of the case.

Analysis: The absence of mala fide intention, the subsequent adjustment of duty payment, and the financial difficulty of the assessee were treated as relevant factors. On that basis, the penalty was considered excessive.

Conclusion: The penalty was reduced to Rs. 1.5 lakhs in favour of the assessee.

Final Conclusion: The substantive finding of liability was maintained, but the quantum of penalty was brought down on grounds of bona fide conduct and absence of intention to evade duty.

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