Retrospective penalty barred under Section 11AC: penalty could not be imposed for the pre-28.09.1996 period.

Penalty under Section 11AC of the Central Excise Act could not be applied to a period before 28.09.1996, because the penal provision was not in force for that earlier period. The duty liability for the pre-28.09.1996 period was not disturbed, but the penalty was held unsustainable to that extent. The operative principle is that a penal provision cannot be given retrospective effect to cover conduct occurring before its commencement.

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Issues: Whether penalty under Section 11AC of the Central Excise Act, 1944 could be imposed for the period prior to 28.09.1996.

Analysis: The dispute related to a period beginning in 1995, while the penalty was imposed under Section 11AC. Since the provision was not in force for the part of the period prior to 28.09.1996, the penalty could not be sustained for that earlier period. The duty liability itself was not disturbed for the pre-28.09.1996 period.

Conclusion: Penalty under Section 11AC was held not imposable for the period prior to 28.09.1996, and the appellant succeeded to that extent.

Ratio Decidendi: A penal provision cannot be applied retrospectively to a period preceding its commencement.

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