Penalty despite duty payment turns on factual intent to evade, and no substantial question of law arose.

Payment of duty under Section 11A(2B) did not, on this record, bar consideration of penalty under Rule 25 where the revenue relied on the fraud, suppression, wilful misstatement or intent-to-evade exception. The court found that the contention that the stock shortage was attributable to an intention to evade duty was not raised before the Tribunal and was essentially factual. In an appeal under Section 35G, it declined to examine that new factual plea, held that no substantial question of law arose, and left the penalty order undisturbed.

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Issues: Whether penalty under Rule 25 could be sustained despite payment of duty under Section 11A(2B) of the Central Excise Act, 1944, and whether any substantial question of law arose for consideration.

Analysis: The appeal was under Section 35G of the Central Excise Act, 1944 and the revenue's challenge rested on the contention that payment of duty by itself did not bar penalty where the case fell within the exception relating to fraud, suppression, wilful misstatement or contravention with intent to evade duty. The Court noted that this factual plea was not raised before the Tribunal. Since the issue whether the stock shortage was attributable to an intention to evade duty was essentially factual and had not been urged at the appellate stage below, the Court declined to examine it in the appeal under Section 35G.

Conclusion: No substantial question of law arose, and the penalty order was not interfered with.

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