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46.1 The petitioner was issued a show cause notice dated 27.06.2020 alleging that the petitioner played a vital role in the attempt to exhibit downgrading of Machine No. 131023840 and also in the proforma respondent company's effort to mis-declare, willfully conceal and mis- represent the material facts with an intention to avade Central Excise Duty. It was therefore alleged that the petitioner had connived intentionally and voluntarily aiding the proforma respondent company to commit an offence which was punishable under Section 9AA of the Central Excise Act, 1944 and accordingly, the petitioner was held liable for penalty under Rule 26 of the Central Excise Rules, 2002, read with Rule 18 of the Rules of 2008. The petitioner was therefore called to show cause within 30 days of the receipt of the said notice as to why penalty under Rule 26(1) of the Central Excise Rules, 2002 read with Rule 18 of the Rules of 2008 should not be imposed upon the petitioner. 46.2 The petitioner submitted it's reply to the said show cause notice controverting the allegations made in the said show cause notice to the effect that the packing speed of machine Model FP Matrix-R cannot be altered by mere changing of CPU without changing Servo Motor was not made by him voluntarily but the same was made under extreme pressure and duress exerted by the Investigating Officers. The petitioner further submitted in the said reply that the maximum speed of the machine is not determined by the Servo Motor and other components but it is the COP of the machine that assimilates and synchronises the task of different components of the machine and limits the maximum speed of the machine as arrived at by the machine manufacturer by the know how which is done by the machine manufacturer inside the CPU through embedded and propriety machine language programmes and thus the maximum speed of the machine can only be altered by the propriety programme residing in the core of the micro-processors of the CPU. The petitioner in the said reply further confirmed that the packing speed of the machine could be changed only and only by changing the CPU. 46.3 The petitioner further in response to the allegation submitted that no other parts of the machine (including Servo Motor) was changed on the date of technical modification of the machine submitted that the except for the CPU/Controller of the machine, no other parts of the machine including the Servo Motor was changed by the proforma respondent company on the date of technical modification of the machine, and further submitted that on the date of technical modification of the machine, the CPU/Controller of the machine was changed thereby downgrading the packing speed of the machine.

46.6. The petitioner submits that from a plain reading of Section 9AA of the Central Excise Act 1944 it would be clear that it contains a deeming provisions and it states that If an offence Is committed by a company, every person who is in charge of, and is responsible to the company for the conduct of the business of the company, as well as the company itself, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, Sub-section (2) of section 9AA Is an exception to sub-section (1). It states that if an offence has been proved to have been committed with the consent or connivance or is attributable even to negligence on the part of the Director, Manager or other officer of the company, such officer is also deemed to be guilty of that offence. It should be noted that negligence is a tort and amounts only to a civil wrong. However, sub-section (2) states that even negligence would make a director guilty of an offence. The explanation to the section gives an artificial definition to the term "company" so as to include firm and other association of individuals and the word 'Director' is to include even a partner in a firm. 46.7. It is submitted that under Section 9AA, under which persons in charge for conducting the affairs of the company are deemed to be guilty, is not a merely a procedural provision. It is a substantive piece of law and there can be no question of giving retrospective effect to it. Such an interpretation would also be hit by Article 20(1) of the Constitution as a person cannot be punished for an act which Was not an offence at the time of commission that act.

46.8. It is submitted that it is a well settled law that conjecture and surmises cannot be the basis of suspicion under Section 9AA of the Central Excise Act, 1944. Specific allegations of the acts or omissions and commissions must be made against a particular person. Penal proceeding cannot be allowed to be proceeded with on vague and camouflage hypothesis and prejudice must be presumed to have been caused to the accused under such circumstances. Suspicion, however grave, cannot take place of proof. If any person is to be made liable under Section 9AA of the Central Excise Act, 1944, necessary averments relating to the consent/connivance/ negligence must made and specific findings must be arrived at to that effect.

46.9. The Petitioner submits that liability of the person mentioned in Sub-Section (2) of Section 9AA of the Central Excise Act, 1944 is on account of specific part played by him relating to the consent/connivance/ negligence. It is necessary to make a person liable under Section 9AA(2) of the Central Excise Act, 1944 to every consent/connivance/ negligence in his part. For making a person liable under Section 9AA(2) of the Central Excise Act, 1944, the mechanical repetition of the requirement under Section 9AA(1) of the Act of 1944 will be of no assistance but there must be necessary averment to how and what manner the accused was guilty and therefore responsible under Sub-section (2) of Section 9AA of the Central Excise Act, 1944. 46.10. The Petitioner submits that in the present case, in the show cause notice dated 27.06.2020, it was alleged that the Petitioner played a vital role in the attempt to exhibit downgrading of Machine No. 131023840 and also in the proforma Respondent Company's effort to mis- declare, wilfully conceal and misrepresent the material facts with an intention to evade Central excise Duty. It was further alleged that the Petitioner had connived intentionally and voluntarily aiding the proforma Respondent Company to commit an offence which was punishable under Section 9AA of the Central Excise Act, 1944, In the said show cause notice, the Petitioner was charged under Section 9AA of the Central Excise Act, 1944 for mis-declaration, willful mis-representing and willful concealment of material facts and thereby conniving and voluntarily aiding the proforma Respondent Company in the short payment of the Central Excise Duty. It is pertinent to mention herein that same show cause notice was also issued to the proforma Respondent Company calling upon the said proforma Respondent company to show cause as to why Central Excise Duty to the tune of Rs. 27,61,33,589/- along with interest and penalty should not be recovered from them. The said proforma Respondent Company also replied to the show clause notice and after the reply to the said show cause notice, by the same order in original dated 24.03.2022, penalty of Rs. 27,61,33,589/- has also been imposed on the proforma Respondent Company. Against the order in Original dated 24.03.2022, the proforma respondent company filed a writ petition before this Hon'ble Court which was registered and numbered as W.P.(C) No.3864/2022.