The demand raised by the 3rd respondent in O.C.No.256 of 2003 dated 14.08.2003 is sought to be quashed in the present writ petition.

2. The learned counsel for the writ petitioner states that the order impugned in the present writ petition is prima-facie without jurisdiction and the liability in respect of the writ petitioners were exempted and therefore, the petitioner is not liable to pay the penalty demanded by the authorities competent. The learned counsel for the petitioner further is of an opinion that the 3rd respondent has no jurisdiction to issue such an order of demand, claiming recovery of arrears by way of an interest in view of the fact that the impugned order was issued without jurisdiction, the writ petitioner is constrained to move the present writ petition.

3. The learned senior standing counsel appearing on behalf of the respondents opposed the contentions by stating that the 3rd respondent has got jurisdiction to issue such an order of demand with reference to Section 11-AA and 11-AB of the Central Excise Act, 1944. In this regard, paragraph 11 of the counter affidavit filed by the respondents states as under :-

“(11) The allegations made in para (7) of the a