COMMNR. OF CENTRAL EXCISE, MUMBAI vs SUNIL SILK MILLS — C.A. No. 4453 - 4454/2003

Case Summary: The Supreme Court allowed the Commissioner of Central Excise's appeals against Sunil Silk Mills. The CEGAT had imposed a mandatory penalty under Rule 96-ZQ of the Central Excise Rules, 1944 for failure to pay duty on time, but scaled it down from 100% of duty to Rs. 1 lakh. The Court held that Rule 96-ZQ's penalty provision is mandatory with no discretion permitted—the use of "shall" indicates obligatory application. The Court set aside the Tribunal's reduced penalty order and restored the Commissioner's original order imposing penalty equal to the outstanding duty amount, leaving costs to be borne by parties themselves. This case analysis is maintained by casestatus.in based on publicly available court records.