M. KATJU, ONKARESHWAR BHATT, JJ. ( 1 ) THIS writ petition has been filed for quashing the impugned notice dated 9. 3. 1995 Annexure-6 to the writ petition as well as recovery certificate dated 29. 1. 1993 Annexure-1 to the writ petition. ( 2 ) HEARD, Sri S. N. Varma, senior advocate and Sri Yashwant Varma learned counsel for the petitioner and learned standing counsel for the respondents. ( 3 ) THE facts of the case are that the U. P. Excise Department held a public auction for selling of rights to deal in liquor and other intoxicating substances in accordance with the U. P. Excise Act. Certain successful bidders purchased drafts favouring the Excise Department which were payable at the Main Branch of the petitioner at Allahabad. These drafts were submitted to the petitioner by the District Excise Officer along with the Government credit challans for their collection from the State Bank of India, Allahabad Branch. In paragraph 7 of the petition, it is alleged that the amount in favour of the excise authorities is not deposited with the petitioner-Bank, but the Bank only acts as an agent for forwarding the same for collection and after receiving the proceeds, the same is sent to the Government Treasury. Thus, the money of the Excise Department is not detained or utilized at any time by the petitioner. However, as alleged in paragraph 9 of the writ petition, due to certain unforeseen circumstances there was some delay in collection of the said drafts from the State Bank of India, Allahabad Branch. Hence the respondent No. 2, the Excise Commissioner, U P. issued a recovery certificate dated 29. 1. 1993 representing penal interest @ 18% at Rs. 1,69,650 under Section 38a of the U. P. Excise Act. ( 4 ) IT is alleged in paragraph 10 of the petition that the penal interest could not have been levied against the petitioner as it only acted as an agent and facilitated the excise authorities in collection of money. Hence, the petitioner took up the matter with the excise officials and also wrote a letter dated 16. 4. 1993 to the Tahsildar Varanasi, true copy of which is Annexure-2 to the writ petition. The petitioner also started negotiations with the excise officials. The excise officials also referred the matter to the State Government as is evident from the letter dated 20. 8. 4. 1993 to the Tahsildar Varanasi, true copy of which is Annexure-2 to the writ petition. The petitioner also started negotiations with the excise officials. The excise officials also referred the matter to the State Government as is evident from the letter dated 20. 8. 1994 Annexure-4 to the writ petition. This matter has engaged the attention of the State government vide letter dated 25. 2. 1995 Annexure-5 to the writ petition. Despite assurance to the petitioner that the matter would be amicably settled, the respondent No. 1 issued demand notice dated 9. 3. 1995 calling upon the petitioner to pay a sum of Rs. 1,69,650. ( 5 ) IT is alleged in paragraph 22 of the petition that the relation between the U. P. Excise commissioner and the petitioner is that of Principal and Agent and hence no interest let alone penal interest can be levied against the petitioner. In paragraph 23 of the writ petition, it is alleged that the money of the respondent No. 2 is not utilized by the petitioner in any manner in the course of its business. ( 6 ) A counter-affidavit has been filed. In paragraph 3 of the same, it is alleged that the bank drafts were sent on 6. 3. 1990 to the petitioner by the District Excise Officer, Varanasi, along with the treasury challans with a request to effect the transfer of the amount in the head 0039 State excise. However, the State Bank of India, Varanasi slept over the bank drafts for nine months and after that on 7. 12. 1990 credited the amount in the State Excise Head. Thus they deprived the state Government from using this money in question causing irreparable loss. Hence it is alleged in paragraph 14 of the writ petition that under the U. P. Excise Act penal interest can be charged. ( 7 ) A rejoinder-affidavit has also been filed and we have perused the same. ( 8 ) THE excise duty is payable under Section 38 of the Act by persons who either import or export, transport, manufacture, cultivate or collect any excisable article as specified by the State government. The petitioner Bank neither imports nor does it export or transport, manufacture or cultivate any excisable article. ( 8 ) THE excise duty is payable under Section 38 of the Act by persons who either import or export, transport, manufacture, cultivate or collect any excisable article as specified by the State government. The petitioner Bank neither imports nor does it export or transport, manufacture or cultivate any excisable article. Under Section 31 of the Act, the licence, permit or pass granted under the Act is granted on payment of such fee as may be prescribed, and this fee is imposed on persons who are granted the privilege of selling any intoxicant within the State of U. P. Since the petitioner does not engage in the above mentioned activities obviously this Section does not apply. Section 38a relates to and deals with situations where a manufacturer, importer of intoxicants or a licensee or permit holder fails to pay any excise revenue. Since the petitioner bank only handles the payment of the money on behalf of excise authorities, it is not liable to pay excise revenue under the Act. The petitioner bank only acts as collecting agent in respect of the drafts deposited by the excise authorities and it forwards the drafts for collection. Hence, in our opinion. Section 38a has no application because the same applies only to cases where a person under liability to pay excise revenue falls to pay the same within a specified period. The petitioner bank acts only as agent for collection of drafts deposited with its branch by the excise authorities. Hence, in our opinion. Section 38a does not apply at alt in the present case. ( 9 ) IN view of the above this petition is allowed. The impugned demand notice dated 9. 3. 1995 annexure-6 as well as the recovery certificate dated 29. 1. 1993 Annexure-1 are quashed. No order as to costs. .