Penalty and interest under Central Excise law after pre-notice duty payment referred for Larger Bench consideration.

Penalty under Section 11AC of the Central Excise Act, 1944 and interest under Section 11AB were examined in the context of duty paid before issuance of the show cause notice. Conflicting decisions on whether such payment affects leviability were noticed, and the matter was directed to be placed before the President for reference to a Larger Bench. The document does not state a final substantive determination on the merits of penalty or interest.

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Issues: Whether penalty under Section 11AC of the Central Excise Act, 1944 and interest under Section 11AB of the Central Excise Act, 1944 are leviable where the duty amount was paid before issuance of the show cause notice.

Outcome: Conflicting decisions on the issue were noticed and the matter was directed to be placed before the Hon'ble President for reference to a Larger Bench.

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