Personal penalty under Central Excise law reduced where duty was promptly paid and mitigating circumstances were present.

Prompt payment of the duty demand and the surrounding mitigating circumstances were treated as relevant factors in fixing the quantum of personal penalty under Rule 173Q of the Central Excise Rules, 1944. The availability of Modvat credit on inputs was also considered in assessing the proper penalty. On that basis, the personal penalty was substantially reduced, while the confirmed duty demand remained undisturbed.

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Issues: Quantum of personal penalty under Rule 173Q of the Central Excise Rules, 1944.

Analysis: The duty demand had already been accepted and paid immediately. The appellants' prompt payment and the surrounding circumstances were treated as mitigating factors in fixing the penalty. The availability of Modvat credit on inputs was also noted as a relevant consideration while assessing the proper quantum of penalty.

Conclusion: The personal penalty was reduced from Rs. 30,000 to Rs. 2,000, while the confirmed duty demand was left undisturbed.

Final Conclusion: Relief was granted only on the penalty component and the demand itself remained intact.

Ratio Decidendi: Prompt payment of duty and other mitigating circumstances may justify substantial reduction of personal penalty under the central excise penalty provision.

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