Retrospective liability under Section 11D rejected for pre-commencement excise collections, with liability confined to post-20-09-1991 amounts.

Section 11D of the Central Excise Act does not operate retrospectively: liability attaches only to amounts collected after its commencement on 20-09-1991, because the word "collected" cannot be stretched to cover earlier collections and a provision creating substantive liability is ordinarily prospective absent clear contrary indication. Amounts collected before that date were therefore not payable to the Central Government, and the issue was answered in favour of the assessee.

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Issues: Whether Section 11D of the Central Excise Act, 1944 applies retrospectively so as to require payment of amounts collected before 20-09-1991.

Analysis: Section 11D obliges a person who has collected an amount as excise duty to pay it to the Central Government, but the provision was introduced only on 20-09-1991. The Court held that the word "collected" cannot be read to fasten liability upon collections made prior to the commencement of the provision. The scheme then in force permitted sugar factories to retain the differential amount, and a provision having penal character or substantive liability is ordinarily prospective in the absence of clear contrary indication.

Conclusion: Section 11D does not operate retrospectively and cannot be applied to amounts collected before 20-09-1991; the issue is answered in the negative in favour of the assessee.

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