Pre-notice duty payment under excise law can bar penalty and interest absent intentional evasion or deception.

Where excise duty is paid before service of the show cause notice, Section 11A(2B) of the Central Excise Act, 1944 generally excludes penalty and interest. That protection does not extend to cases of intentional non-payment or deception, but the Revenue failed to establish any such fraudulent element here. On the stated facts, the assessee's pre-notice payment displaced the normal penal consequence, and penalty and interest were held not leviable.

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Issues: Whether penalty and interest could be levied where the duty had been paid before issuance of the show cause notice and there was no intentional evasion or deception.

Analysis: The appeal concerned the effect of payment of duty before service of notice. The Court noted that under Section 11A(2B) of the Central Excise Act, 1944, where escaped duty is paid before notice, the normal consequence is that penalty and interest are not attracted. The quoted Supreme Court exposition clarified that this position does not apply where the non-payment is intentional and by reason of deception, but the Revenue did not establish any such element in the present case.

Conclusion: Penalty and interest were not leviable on the facts of the case, and the finding in favour of the assessee was sustained.

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