Per V.K.Agrawal:

In this appeal filed by M/s. Vishnu Sahai Subhash Chander, the issue involved is whether the penalty under Rule 209A of the Central Excise Rules is imposable on them.

2. Shri K.K. Anand, Ld. Advocate, submitted that the Central Excise Officers Chandigarh searched the factory premises of M/s. New India Dyg. & Finishing Mills, M/s. New India Printing Works, M/s. J.D. Woollen and Silk Mills & M/s. Pahwa Silk Mills Pvt. Ltd. on 29.10.88; that during the investigation the officers obtained photo copies of the outside bill collection register of the Punjab & Sind Bank; that as per the said register 38 sale bills for the period 18.1.88 to 29.3.88 of processed man made fabrics valued at Rs. 16.98 lakhs issued by New India Printing Works were pending collection; that similarly 77 sale bills for the period 1.3.88to 10.11.88 of processed man made fabrics valued at Rs. 34.06 lakhs were also pending. The ld. Advocate, further, mentioned that on being asked about outstanding bills which were not accounted for in the account books of the Appellants, Shri Dharam Pal, Partner, in his statements dt. 13.1.89 deposed that they had not received the fabrics covered by 3 8 bills though the Appellant had signed the Hundies in respect of said bills presented by Punjab & Sind Bank; that these were only accommodation bills and they had not made any payment in respect of these bills to the Bank; that after investigation, show cause notices were issued by the Collector, and the matter was initially adjudicated by the Collector under Adjudication Order No. 6/89 dt. 10.4.90 confirming the demand of duty against the manufacturers and imposing penalty on certain parties; that no penalty was imposed on the Appellants by the Collector as he extended the benefit of doubt to the customers giving his findings that it was not in their knowledge that the fabrics purchased by them was non-duty paid fabrics; that the order, on appeals filed by aggrieved parties, was remanded back by the Tribunal vide Final Order Nos. E/ 55-60/92-D dt. 7.2.92. He emphasised that no appeal was filed by the Department against non-imposing of penalty on the customers of the fabrics including appellants, and as such in remand proceedings case could not be re-opened against the appellants as they were not party before the Appellate Tribunal; that penalty under Rule 209A cannot be imposed as they had not received the fabrics at all and since they had not received the fabrics in question, the question of having any knowledge or reason to believe that the goods were liable for confiscation does notarise; that the Commissioner has discriminated against them as in respect of other 39 Customers who were placed similarly, no penalty has been imposed on them. He also mentioned that in any event the imposition of penalty is illegal in view of the decision of the Delhi High Court in the case of Pioneer Silk Mills Pvt. Ltd. Vs. U.O.I., 1995 (80) ELT 507 (Delhi), wherein it was held that Additional Duties of Excise (Goods of Special Importance) Act, 1957 contains no provisions for imposition of penalty and the provisions relating to confiscation and penalty in the Central Excise Act are not applicable to the additional excise duties; that this decision has been followed by the Tribunal in the case of CCE, Mumbai Vs. Prakash Moti Ram Mishra, 2001 (127) ELT 147 (T). He also mentioned that the amendment carried out in 1994 cannot be made applicable retrospectively particularly in respect of penalty. He relied upon the decision of the Supreme Court in the case of CCE, Coimbatore Vs. Elgi Equipments, 2001 (42) RLT 974 (SC)=2001 (128) ELT 52 (SC), wherein it was held that the illegality committed prior to insertion of Section 11 AC in the Central Excise Act cannot be the subject matter of penalty under the said provisions.

3. Countering the arguments, Shri R.C. Sankhla, ld. JDR, submitted that the Appellate Tribunal had remanded the matter to the Commissioner as it was held by it that the