Delay is condoned.

2.Having heard learned Attorney General, we are in entire agreement with the view expressed by the High Court that Section 11AC of the Central Excise Act, 1944, is prospective in operation and the illegality committed prior to insertion of Section 11AC in the, cannot be the subject matter of penalty under the said provision.

3.The learned Attorney General has placed reliance on the judgment of this Court in Mithilesh Kumari v. Prem Behari Khare. But the following observation in that decision need to be noted :

The presumption against retrospective operation is strong in cases in which the statute, if operated retrospectively, would prejudicially affect vested rights or the illegality of the past transactions, or impair contracts, or impose new duty or attach new disability in respect of past (emphasis transactions or consideration already passed. supplied)

This observation supports our view.

4.For this reason there is no justifiable ground to grant leave to appeal against the impugned order of the High Court. The Special Leave Petition is, therefore, dismissed.