Case Note & Summary
The Commissioner of Central Excise, Mumbai-V, filed an appeal under Section 35G of the Central Excise Act, 1944 against the order dated 28th April, 2004 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai. The appeal was admitted on 29th September, 2005 to consider the substantial question of law: whether the provisions of Section 11AC are applicable to cases where show cause notice is issued subsequent to the enforcement of Section 11AC (i.e., 28.9.1996) even though the period of dispute is prior to that date. Section 11AC was introduced by Act 33 of 1996 with effect from 28th September, 1996. In this case, the show cause notice was issued on 12th June, 1998 for a period prior to 28.9.1996. The Tribunal had held that Section 11AC could not be applied retrospectively. The High Court, after hearing the parties, dismissed the appeal, holding that Section 11AC is prospective in nature and cannot be applied to periods prior to its enforcement, even if the show cause notice was issued after the enforcement date. The court reasoned that penal provisions cannot be given retrospective effect unless expressly stated or necessarily implied. The appeal was dismissed with no order as to costs.
Headnote
A) Central Excise - Penalty - Section 11AC - Retrospectivity - Whether penalty under Section 11AC of the Central Excise Act, 1944 can be imposed for a period prior to its enforcement (28.9.1996) when show cause notice is issued after that date - Held that Section 11AC is prospective and cannot be applied to periods prior to its enforcement, as it creates a new penal liability and cannot be retrospective in the absence of express language or necessary implication (Paras 1-3).
Issue of Consideration
Whether the provisions of section 11AC of the Central Excise Act, 1944 are applicable to cases where show cause notice is issued subsequent to the enforcement of provisions of section 11AC i.e. 28.9.1996 even though the period of dispute is prior to 28.9.1996?
Final Decision
Appeal dismissed. No order as to costs.
Law Points
- Penal provisions cannot be applied retrospectively
- Section 11AC of Central Excise Act
- 1944 is prospective in operation
- Show cause notice issued after enforcement date does not attract penalty for prior period
