Voluntary pre-notice duty payment defeats Rule 173Q penalty where there is no deliberate suppression or intent to evade.

Penalty under Rule 173Q of the Central Excise Rules, 1944 was held unwarranted where the assessee had cleared excisable goods without initial payment of duty but paid the duty voluntarily before the show cause notice. The Tribunal treated the pre-notice remittance as corrective action on discovery of the error and found no deliberate suppression or intent to evade duty. Applying earlier decisions, it held that the penal provision should not be invoked in such circumstances and set aside the penalty.

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Issues: Whether penalty under Rule 173Q of the Central Excise Rules, 1944 was sustainable when the duty on the cleared goods had been paid voluntarily before issue of the show cause notice.

Analysis: The assessee had cleared excisable goods without payment of duty but remitted the duty amount before the show cause notice was issued. The Tribunal treated this prompt payment as corrective action taken on discovery of the mistake. It held that the facts did not justify a finding of deliberate suppression or intent to evade duty. Relying on earlier decisions, the Tribunal accepted that where the assessee rectifies the error and discharges the duty before notice, the penal provision should not be applied.

Conclusion: Penalty under Rule 173Q was not exigible and was set aside.

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