1. J.K. Processors are independent processors of Textile Fabrics operating under Rule 96ZQ of the Central Excise Rules, 1944. Sub-rule (3) requires 50% of the duty determined as payable for the month to be paid by the 15th of the month and remainder to be paid by the end of that month. Sub-rule (5) prescribed that in the event of delay interest was payable from the due date to the date of actual payment and also that a penalty equal to Rs. 5,000/-or the amount outstanding was imposable whichever was greater. In the present case the duty was deposited on 16.04.1999, when it was due on 15.04.1999 along with the interest for one day. Show cause notice was issued why penalty should not be imposed. The assessees pleaded that they had gone to the bank, on 15.04.1999 but that the bank did not accept a cash deposit. It was accepted the next day and the delay was beyond the control of the assessee. The Dy. Commissioner did not accept the plea and imposed a penalty of Rs. 7.5 lakhs. The assessees then filed an appeal. The Commissioner directed them to pre-deposit the entire penalty. He repeated the orders in the face of a modification application also. In the face of non-compliance, he dismissed the appeal before him. Hence this appeal and the prayer for waiver of pre-deposit of the penalty.
2. For reasons recorded hereafter I waive the requirement of pre-deposit and proceed to decide the appeal.
3. The assessees had given a lucid explanation as to why the delay was caused. The high-handed and erratic behaviour on the nationalised banks is the bane of all persons dealing with them. The Commissioner's stand was unduly rigid. Ordinarily I would have taken a serious view of a recalcitrant assessee who would not follow the directions of the lower appellate authority. But in this case for the ground stated above I make an exception.
4. It is correct that even for this unintentional lapse the assessee deserves to be imposed a penalty. But the penalty should be of therapeutic proportions. Although, the wording of the Sub-rule indicates a mandatory nature of the penalty, I find that in the case of Escorts J.C.B. Ltd. v. CCE, 1999 (35) RLT 9 (CEGAT) the Tribunal has held that even in the case of Section 11AC of the Central Excise Act, 1944, the concerned authorities have discretion to impose lesser penalty. I therefore reduce the penalty imposed from Rs. 7.5 lakhs to Rs. 5,000/-. The appeal is so decided.