Retrospective penalty under Section 11AC is impermissible for conduct completed before the provision was inserted.

Section 11AC of the Central Excise Act, 1944, being a penal provision imposing mandatory penalty, cannot be applied to contraventions completed before its insertion unless the statute clearly provides retrospective operation. The article notes that the alleged contravention occurred prior to insertion of the provision, so invoking Section 11AC for that earlier period would amount to impermissible retrospectivity. Relying on prior authority taking the same view, the text states that the provision could not be used for the period in question and that the assessee's objection to retrospective penalty application was upheld.

---

---

Issues: Whether Section 11AC of the Central Excise Act, 1944 could be invoked for alleged contravention occurring before its insertion and whether its application in such a case would amount to impermissible retrospective operation.

Analysis: Section 11AC is a penal provision providing for mandatory penalty. The alleged contravention occurred before the provision was inserted into the Act. Applying the section to such prior conduct would give it retrospective effect, which is impermissible in law. Support was drawn from prior authority of the Court taking the same view.

Conclusion: Section 11AC could not be invoked for the period in question, and the challenge to the impugned order failed.

Final Conclusion: The appeal was rejected and the assessee's position that the penalty provision could not be applied retrospectively was upheld.

Ratio Decidendi: A penal provision imposing mandatory penalty cannot be applied to conduct completed before its insertion unless the statute clearly makes it retrospective.

---