Prospective application of mandatory equal penalty bars retrospective use of Customs and Excise penalty provisions for earlier periods.

Mandatory equal penalty under Section 114A of the Customs Act, 1962 and Section 11AC of the Central Excise Act, 1944 could not be applied to a demand relating to November 1990 to February 1996, because those provisions came into force only on 20.09.1996 and were not expressed to be retrospective. Treating the equal-penalty regime as substantive in nature, the Tribunal held that it operates prospectively unless the legislature clearly provides otherwise. The cited authorities supporting mandatory penalty were found inapplicable on the facts, and the order declining enhancement of penalty was sustained. The Revenue's challenge was rejected.

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Issues: Whether the penalty provisions prescribing equal penalty under Section 114A of the Customs Act, 1962 and Section 11AC of the Central Excise Act, 1944 could be applied to a period prior to their commencement.

Analysis: The demand related to the period from November 1990 to February 1996, while Sections 114A and 11AC came into force on 20.09.1996. The provisions were not made expressly retrospective. The Tribunal held that the mandatory equal-penalty regime could not be invoked for a prior period, and treated the cited decisions supporting mandatory penalty as inapplicable on the facts. It also treated the penalty provisions as substantive in character and therefore not retrospectively applicable.

Conclusion: The mandatory equal penalty under Section 114A of the Customs Act, 1962 and Section 11AC of the Central Excise Act, 1944 could not be imposed for the disputed period, and the Revenue's challenge failed.

Final Conclusion: The impugned order declining to enhance the penalty was sustained, and the Revenue's appeal was rejected.

Ratio Decidendi: A penalty provision creating mandatory equal penalty, being substantive in nature, applies only prospectively unless the legislature clearly provides otherwise.

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