Prospective operation of Section 11D bars recovery of pre-insertion collections under the Central Excise Act.

Section 11D of the Central Excise Act, 1944 was treated as prospective only and could not be applied to amounts collected and retained before its insertion. In the absence of express legislative language giving retrospective effect, a statutory liability cannot be imposed for a period that ended before the provision came into force. The authorities relied on support the view that Section 11D does not authorise recovery for pre-insertion collections, so the demand for the disputed period was unsustainable.

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Issues: Whether Section 11D of the Central Excise Act, 1944 could be applied retrospectively to demand amounts collected and retained for a period prior to its insertion.

Analysis: The relevant period preceded the insertion of Section 11D. In the absence of express language giving retrospective effect, a statutory provision cannot be applied to liabilities arising before its commencement. The authorities relied upon support the view that Section 11D operates prospectively and does not authorise recovery for amounts collected before the provision came into force.

Conclusion: Section 11D could not be invoked retrospectively for the disputed period, and the demand was unsustainable.

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