JUDGMENT : Akil Kureshi, J. 1. The petitioner – Gujarat Narmada Valley Fertilizers Co. Ltd. has filed this petition with multiple prayers. Barring the prayer for declaring section 11AA of the Central Excise Act 1944 (“the Act” for short) as ultra vires the Constitution, a prayer which the counsel for the petitioner did not press, in essence, the petitioner's grievance revolves around the Central Excise authorities charging interest on delayed payment of excise duty under section 11AA of the Act. In this context, the petitioner has challenged an order dated 1.9.2004 passed by the Commissioner of Central Excise in the following background. 2. The petitioner is engaged in manufacturing fertilizers. For the purpose of its manufacturing activity, the petitioner would use Low Sulphur Heavy Stock (“LSHS” for short) as a raw material. As long as such raw material is used for manufacturing fertilizers, it would invite concessional rate of duty. On the premise that the petitioner utilised the concessional rate of duty provision for purchase of such product but utilised part of it not for manufacturing of the fertilizers but for generation of steam, the department instituted proceedings for recovery of unpaid excise duty. We are not concerned directly with this litigation since upto the level of Supreme Court, the issue was decided against the petitioner. To a limited extent, our interest would be in an order dated 26.6.2003 passed by the Customs Excise and Service Tax Appellate Tribunal (“CESTAT” for short) in which while confirming the duty demand, the Tribunal recorded the contention of the counsel for the petitioner on the question of interest on unpaid duty as under :- “He also submitted that interest was not recoverable since in the 13 Show Cause Notices covered by this order, there was no proposition to recover the interest, as demanded is for the period July 91 to May 95 as per Board's Circular No.655/46/2002CX, dated 26.8.2002. The interest cannot be recovered and requested for disposal of the appeal in this case.” 3. In this context, the Tribunal provided as under :- “As regards interest on the amount of duty confirmed, the matter is remitted back for re-quantification in terms of Board's order. The duties as determined are to be recovered along with interest, which should be re-quantified.” 4. Pursuant to such directions of the Tribunal, Superintendent of Central Excise, at one stage, decided the question of interest against the petitioner. The duties as determined are to be recovered along with interest, which should be re-quantified.” 4. Pursuant to such directions of the Tribunal, Superintendent of Central Excise, at one stage, decided the question of interest against the petitioner. The petitioner challenged such order before the High Court and made a grievance that such decision was without taking into account the Board circular referred to by the CESTAT. The High Court by a judgment dated 18.11.2003 in Special Civil Application No.12194/2003, once again remanded the proceedings before the excise authorities on the question of charging interest. This time around the Commissioner took up the issue, heard the petitioner and passed the impugned order holding that the petitioner was liable to pay interest in terms of section 11AA of the Act. The petitioner's contention that when the duty liability arose, section 11AA of the Act was not in the statute book was not accepted holding that such provision for interest would apply even where the determination of the excise liability is made after the provision was introduced in the Act. This is the bone of contention between the two sides. The petitioner points out that the duty liability pertained to a period between 1.7.1991 to 31.5.1995. Section 11AA was introduced in the Act with effect from 26.5.1995 and, therefore, except for the duty liability arising during a short period of about one week, no interest liability would arise. The department contends that section 11AA would apply to all cases of unpaid duty, whether the liability arose before 26.5.1995 or whether the determination of the duty was made before or after the said date. 5. Before we address this central issue, we may also briefly refer to the CBEC circular dated 26.8.2002. Circular concerns applicability of section 11AB of the Act. Referring to the proviso to subsection (1) of section 11AB inserted with effect from 11.5.2001, in this circular, it was clarified that the section would apply only in respect of clearances effected after 28.9.1996 (i.e. the date on which section 11AB was inserted) irrespective of the date of passing of adjudication order. The Commissioner in the impugned order was of the opinion that this circular would not apply since it covers the case under section 11AB of the Act in which the legislature had clarified the position by introduction of proviso to subsection (1). The Commissioner in the impugned order was of the opinion that this circular would not apply since it covers the case under section 11AB of the Act in which the legislature had clarified the position by introduction of proviso to subsection (1). In his opinion language used in section 11AA was vastly different. 6. Learned counsel Shri Kamal Trivedi appearing for the petitioner took us through the statutory provisions of section 11AA and section 11AB and the legislative changes made in these provisions from time to time to contend that : a. The liability to pay interest is a substantive liability and can arise only prospectively. Section 11AA does not have retrospective effect and therefore, would cover only those cases where duty liability arose after 26.5.1995 i.e. the date on which section 11AA was inserted in the said Act. In support of this contention, counsel relied on the decision of Supreme Court in case of J.K. Synthetics Limited v. Commercial Taxes Officer reported in (1994) 4 SCC 276 , in which it was held that ordinarily, the charging section which fixes the liability is strictly construed but not the machinery provisions. It was held that the provisions by which the authority is empowered to levy interest, even if construed as forming part of the machinery provisions, is substantive law for the reason that in the absence of contract or usage interest that cannot be levied under law and cannot be recovered by way of damages for wrongful detention of the amount. It was further observed that interest was charged on the strength of a statutory provision, may be with the objective to compensate the Revenue for delay in payment of tax. But regardless of the reason which impelled the Legislature to provide for charging interest, the Court must give that meaning to it as is conveyed by the language used and the purpose to be achieved. Any provision made in a statute for charging or levying interest on delayed payment of tax must be construed as a substantive law. b. Circular dated 26.8.2002 issued by CBEC would cover the case of the petitioner also. He pointed out that section 11AB, as it stood at the relevant time, provided for payment of interest where non payment of excise duty was due to fraud, misrepresentation, etc. b. Circular dated 26.8.2002 issued by CBEC would cover the case of the petitioner also. He pointed out that section 11AB, as it stood at the relevant time, provided for payment of interest where non payment of excise duty was due to fraud, misrepresentation, etc. If such provision is made prospective, it is difficult to appreciate that the legislature would have meant to apply section 11AA with retrospective effect which provides for interest on delayed payment of duty which is not on account of any of the elements such as fraud, misrepresentation, etc. referred to in section 11AB of the Act. c. Counsel pointed out that by virtue of section 75 of the Finance Act with effect from 28.9.1996, section 11AA was made subject to section 11AB. Therefore, all conditions necessary for application of section 11AB must be satisfied before applying section 11AA also. 30.09.2016 In this context, counsel relied on the following decisions : 1. In case of Union of India and others v. Brigadier P.S. Gill reported in (2012) 4 SCC 463 , in which the phrase “subject to” came up for consideration for interpretation. The Supreme Court referring to various earlier judgments held and observed as under :- “22. We have, therefore, no hesitation in rejecting the submission of Mr. Tankha that the expression "subject to the provisions of Section 31" are either ornamental or inconsequential nor do we have any hesitation in holding that right of appeal under Section 30 can be exercised only in the manner and to the extent it is provided for in Section 31 to which the said right is made subject.” 2. In case of Commissioner of C. Ex. & Customs v. Saurashtra Cement Ltd reported in 2010 (260) ELT 71 (Guj.), where the Division Bench of this Court in context of rule 25 of the Central Excise Rules carrying the expression “subject to the provisions of section 11AC of the Act”, observed that “Since Rule 25 can be invoked subject to the provisions of section 11AC of the Act, as a natural corollary, the ingredients mentioned in section 11AC are also required to be considered while determining the question of levying of penalty under Rule 25 of the Central Excise Rules.” 7. On the other hand, learned counsel Ms. On the other hand, learned counsel Ms. Trusha Patel for the Union of India submitted that once the petitioners have given up the challenge to the vires of the statutory provisions, her role would be limited. Learned counsel Ms. Avni Mehta for the department opposed the petition contending that statutory provisions are sufficiently clear. The petitioner was liable to pay interest in terms of section 11AA of the Act. The Commissioner has therefore, passed an order which calls for no interference. 8. In facts of the case, two issues therefore, arise. One whether the petitioner's liability was to pay interest under section 11AA or section 11AB of the Act and if it was under the former, such liability would relate to the date of clearances. 9. In this context, we may refer to the said two sections and multiple amendments made in such provisions. Under the Finance Act 1995, the parliament inserted section 11AA in the Act with effect from 26.5.1995. Relevant portion of such section reads as under : “Section 11AA. Interest on delayed payment of duty.- Where a person, chargeable with duty determined under subsection (2) of section 11A, fails to pay such duty within three months from the date of such determination, he shall pay, in addition to the duty, interest at such rate not below ten per cent and not exceeding thirty percent per annum, as is for the time being fixed by the Board, on such duty from the date immediately after the expiry of the said period of three months till the date of payment of such duty” 10. Section 11AB was inserted under the Finance Act, 1996 with effect from 28.9.1996 which at that time read as under :- “Section 11AB. Section 11AB was inserted under the Finance Act, 1996 with effect from 28.9.1996 which at that time read as under :- “Section 11AB. Interest on delayed payment of duty.- (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any willful misstatement of suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the person liable to pay the duty as determined under subsection (2), of Section 11A shall, in addition to the duty, be liable to pay interest at such rate not below ten per cent and not exceeding thirty per cent per annum, as is for the time being fixed by the Board, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act or the rules made thereunder or from the date of such erroneous refund, as the case may be, but for the provisions contained in subsection (2) of section 11A till the date of payment of such duty: (2) For the removal of doubts, it is hereby declared that the provisions of subsection (1) shall not apply to cases where the duty became payable before the date on which the Finance (No.2) Bill, 1996 receives the assent of the President.” 11. Simultaneously, under the same Finance Act with effect from 28.9.1996, the legislature added the following words in the beginning of section 11AA :- “Subject to the provisions contained in Section 11AB” 12. With effect from 11.5.2001 under the Finance Act, 2001, subsection (2) was inserted in section 11AA as under:- “(2) The provisions of subsection (1) shall not apply to cases where the duty becomes payable on and after the date on which the Finance Bill, 2001 receives the assent of the President.” 13. With effect from 11.5.2001 under the Finance Act, 2001, subsection (2) was inserted in section 11AA as under:- “(2) The provisions of subsection (1) shall not apply to cases where the duty becomes payable on and after the date on which the Finance Bill, 2001 receives the assent of the President.” 13. Simultaneously from the same date, i.e. 11.5.2001, under the Finance Act, 2001, subsections (1) and (2) of section 11AB were recast, relevant portion of which read as under:- “(1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person who is liable to pay the duty as determined under subsection (2), or has paid the duty under subsection (2B), of Section 11A shall, in addition to the duty, be liable to pay interest at such rate not below eighteen per cent and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act or from the date of such erroneous refund, as the case may be, but for the provisions contained in subsection (2), or subsection (2B), of section 11A, till the date of payment of such duty: Provided that .... (2) The provisions of subsection (1) shall not apply to cases where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President.” 14. Before focusing our attention to interpretation of section 11AA, we may compare the two sections and their interconnection in relation to the successive amendments noted above. Section 11AA in its original form provided for charging of interest where a person who is charged with duty determined under subsection (2) of section 11A, failed to pay such duty within three months from the date of such determination. In such a case, he would be liable to pay interest at such rate not below ten per cent and not exceeding thirty per cent per annum, as may be fixed by the Board, on such duty, from the date immediately after expiry of said period of three months till the date of payment of such duty. In such a case, he would be liable to pay interest at such rate not below ten per cent and not exceeding thirty per cent per annum, as may be fixed by the Board, on such duty, from the date immediately after expiry of said period of three months till the date of payment of such duty. In other words, whenever a person is charged with duty determined under subsection (2) of section 11A, he would pay interest at the specified rate on the duty which remained unpaid after three months of determination, till actual payment. 15. At this stage, we may also briefly refer to proviso to section 11AA which provides that where a person chargeable with duty determined under subsection (2) of section 11A before the Finance Bill of 1995 received the assent of the President, fails to pay such duty within three months from such date, then such person shall be liable to pay interest under the said section from the date immediately after three months from such date till the payment of such duty. In other words, the proviso would apply to a case where the determination under subsection (2) of section 11A took place before the introduction of section 11AA. In such a case, the liability to pay interest would begin after three months from the date when the Finance Bill, 1995 received the assent of the President till the date of payment of such duty. This proviso would come up for further discussion at a later stage. 16. In contrast to these provisions contained in section 11AA of the Act, Section 11AB which was introduced in the next Finance Act provided for charging of interest in cases where the duty of excise was not levied or paid or short levied or short paid or erroneously refunded by reason of fraud, collusion, willful misstatement or suppression of facts or contravention of the provisions of the Act or the Rules, with intent to evade payment of duty, as determined under subsection (2) of section 11A. In such a case in addition to the duty, there would be liability to pay interest at the rates that may be specified by the Board from the first date of the month succeeding the month in which the duty ought to have been paid or from the date such erroneous refund was granted till the date of payment of such duty. Subsection (2) of section 11AB was meant to remove doubts and provided that the proviso to subsection (1) would not apply to cases where the duty become payable before the date when the Finance Bill, 1996, received the President's assent. 17. Under subsection (1) of section 11AB thus the liability to pay interest would arise only if short payment or non payment of duty or erroneous refund was by reason of fraud, collusion, etc. and in such a case, liability to pay the interest would begin from the first date of the month succeeding the month in which the duty ought to have been paid or the refund was erroneously granted. 18. If we compare the provisions of section 11AA and section 11AB of the Act, there are three significant differences. First, that section 11AA covers all cases of non payment of duty and did not unlike section 11AB, confine its application to the duty not being paid by the reason of fraud, collusion, etc. Second, under section 11AA, the liability to pay interest would commence after three months of determination of duty under subsection (2) of section 11A or three months after introduction of section 11AA if the determination was made earlier, whereas under subsection (1) of section 11AB, such liability would arise immediately upon the end of the month during which the duty ought to have been paid. Third, under section 11AA, there was no clarification that interest liability would not arise in cases where the duty become payable before the date of introduction of the section, a feature introduced under subsection (2) of section 11AB of the Act. On the contrary, the proviso to section 11AA made it amply clear that in given set of circumstances, the section applies even in cases where the liability to pay duty had arisen earlier. On the contrary, the proviso to section 11AA made it amply clear that in given set of circumstances, the section applies even in cases where the liability to pay duty had arisen earlier. We may recall this proviso made the interest liability applicable in cases where the determination of duty under subsection (2) of section 11A was done before the section was introduced but provided for a period of three clear months after the introduction of the section for payment of such duty, failing which, the interest liability post such period of three months would arise, in contrast to subsection (2) of section 11AB. Thus, the proviso to section 11AA carried a clear indication that the section was meant to apply even in cases where liability to pay the duty might have arisen earlier or even determination might have been completed before introduction of the section to the statute. This last distinction would be significant in context of the petitioner's contention that section 11AA did not have any retrospective applicability. As is well known, the statute which creates new rights or liabilities, is ordinarily to be applied prospectively unless either expressly or by necessary implication, it is given retrospective effect. The fact that section 11AB was made expressly prospective is clear from the language used in subsection (2) of section 11AB. In contrast, there are inbuilt indications in section 11AA that the said section would have a retroactive effect. The main body of section 11AA in its original form did not limit the liability to pay interest in cases where duty liability arose after introduction of the said section. It only provided that the interest would be payable when a person charged with duty by determination under subsection (2) of section 11A failed to pay the same within three months from the date of such determination. It may however, be open to a person to contend that interest liability being a substantive liability, the statute would not cover the past cases before its introduction. However, the proviso to section 11AA would change the entire situation. It may however, be open to a person to contend that interest liability being a substantive liability, the statute would not cover the past cases before its introduction. However, the proviso to section 11AA would change the entire situation. Under such proviso, even in cases where the duty liability not only arose prior to the introduction of section 11AA but was also determined under subsection (2) of section 11A and in which cases, the liability to pay interest would commence after three months of the introduction of section 11AA to the Act on the component of duty which remained unpaid after such date. In other words, the statute while creating a new provision for charging interest granted a moratorium of three months in cases where duty had remained unpaid on the date of introduction of the interest provision. If the duty is paid within such period, there would be no interest liability. If even after completion of three months from introduction of the provision, the duty remained unpaid, the liability to pay interest would commence from such date. In the background of such provision, if we accept the contention of Shri Trivedi for the petitioner, the case of the petitioner would fall neither in the main body of section 11AA since in his submission the interest liability would not apply to past cases, nor would be covered under the proviso since in his case, the determination under subsection (2) of section 11A took place after the introduction of section 11AA. Surely, the legislature cannot be attributed the intention to bring about such an incongruent result. This in our opinion would be a strong indication that by necessary implication section 11AA was meant to apply to all cases where the duty remained unpaid after introduction of section 11AA to the statute. In cases where whether the liability to pay the duty arose before or after the introduction of section 11AA but determination took place after the said date, the liability to pay interest would arise under the main body of the section. In cases where the liability as well as determination both took place before the introduction of section 11AA, such cases would be covered under the proviso and liability to pay interest would commence after the end of three months from the date of introduction of section 11AA to the Act. In cases where the liability as well as determination both took place before the introduction of section 11AA, such cases would be covered under the proviso and liability to pay interest would commence after the end of three months from the date of introduction of section 11AA to the Act. Significantly, in neither case, the interest liability would be for a period prior to introduction of section 11AA. This provision therefore has retroactive applicability. 19. We may now advert to the counsel's contention regarding the effect of the words “Subject to the provisions contained in Section 11AB” inserted in section 11AA. To recall, these words were added to section 11AA simultaneously with insertion of section 11AB with effect from 28.9.1996. Prior to this date, there was only one provision for charging the interest namely, section 11AA, which as noted, would cover all cases of unpaid duty whether on account of fraud, willful misstatement, collusion etc. or otherwise. Section 11AB however, created a separate class and charged interest only in cases where non payment, short payment of erroneous refund of duty was by reason of fraud, collusion, etc. With introduction of section 11AB of the Act, thus the statute contained two provisions both charging interest. In absence of any further clarification, section 11AA would cover all cases of unpaid duty and would not exclude those which were for the reason of fraud, collusion, etc. Section 11AB was confined to a small class of cases of unpaid duty and it may be possible, in absence of any further clarification, to apply both the provisions in cases where the non payment of duty was on account of fraud, collusion, etc. To make the matters beyond any debate, the legislature inserted words “Subject to the provisions contained in Section 11AB” in Section 11AA. 20. The expression “subject to” is a well known legislative device used in similarly but not always identical situations. In case of South India Corporation (P) Ltd. v. Secretary, Board of Revenue Trivandrum and another reported in AIR 1996 SC 207 , the Constitution Bench of the Supreme Court observed that the expression “subject to” conveys the idea of a provision yielding place to another provision to which it is made subject. In case of South India Corporation (P) Ltd. v. Secretary, Board of Revenue Trivandrum and another reported in AIR 1996 SC 207 , the Constitution Bench of the Supreme Court observed that the expression “subject to” conveys the idea of a provision yielding place to another provision to which it is made subject. In case of The State of Bihar v. Sir Kameshwar Singh reported in AIR 1952 SC 252 , yet another Constitution Bench of the Supreme Court, in context of the terms “subject to” observed as under :- “The only purpose of the words "subject to" occurring in Entry 36 is to indicate that legislation under Entry 36 should be subject to any law made by Parliament in exercise of its legislative power under Entry 42 of the Concurrent List. Both legislatures can legislate under Entry 42 but the Parliamentary statute made in exercise of powers under this entry would have preference over a State law in case of repugnancy and it was for this reason that reference was made to Entry 42 in the head of legislation mentioned in the State List under Entry 36. In other words, it only means that whenever a law is made by a State Legislature in exercise of its legislative power under Entry 36, that law will be subject to the provisions of a Parliament statute made in exercise of its legislative powers under Entry 42 of the Concurrent List.” 21. In case of K.R.C.S. Balakrishna Chetty and Sons and Co. v. The State of Madras reported in AIR 1961 SC 1152 , the three Bench Judge of the Supreme Court observed that use of words subject to has reference to effectuating the intention of the law and the correct meaning is conditional upon. In case of Ashok Leyland Ltd. v. State of T.N. and another reported in (2004) 3 SCC 1 , the Supreme Court referred to the dictionary meaning of term “subject to' as liable, subordinate, subservient, inferior, obedient to, governed or effected by. In case of Chandavarkar Sita Ratna Rao v. Ashalata S. Guram reported (1986) 4 SCC 447 , the Supreme Court observed that the word 'notwithstanding' is in contradistinction to the phrase 'subject to', latter conveying the idea of a provision yielding place to another provision or other provision to which it is made subject. 22. In case of Chandavarkar Sita Ratna Rao v. Ashalata S. Guram reported (1986) 4 SCC 447 , the Supreme Court observed that the word 'notwithstanding' is in contradistinction to the phrase 'subject to', latter conveying the idea of a provision yielding place to another provision or other provision to which it is made subject. 22. When the legislature therefore, makes a provision subject to another provision, the former would yield to the latter and in other words, in case of a conflict, the provisions of the latter would prevail. It is sometimes seen as the reverse of the latter provision carrying a non obstante clause. In context of section 11AA and section 11AB of the Act, therefore, the plain intention of the legislature while making section 11AA subject to section 11AB was to avoid any conflict between the two statutory provisions. The former would encompass all cases of unpaid duty except those covered by the latter which is confined to cases where such duty remained unpaid on account of fraud, misstatement, collusion, etc. By providing that section 11AA would be subject to section 11AB, the legislature made it amply clear that those cases of unpaid duty by the reason of fraud, willful misstatement, etc. would be covered by section 11AB only and in a case which is covered by section 11AB, section 11AA would yield to the said provision. The contention therefore, that for applying section 11AA, all conditions provided in section 11AB must be satisfied, is devoid of any merits. The absurd results this contention would lead are plain to see. If for application of section 11AA, all the conditions of section 11AB are to be satisfied, section 11AA would have no independent existence and no purpose of enactment. Surely, the legislature cannot be seen to have framed two different provisions but both covering only one situation. 23. Before closing this issue, we may briefly refer to the later legislative changes though not directly pertaining to our case. With effect from 11.5.2001, under the newly inserted subsection (2) of section 11AA, the applicability of erstwhile section 11AA was limited to cases where the duty became payable after the date on which the Finance Bill, 2001, received the assent of the President. Accordingly, for all such cases, section 11AA would have no further applicability. With effect from 11.5.2001, under the newly inserted subsection (2) of section 11AA, the applicability of erstwhile section 11AA was limited to cases where the duty became payable after the date on which the Finance Bill, 2001, received the assent of the President. Accordingly, for all such cases, section 11AA would have no further applicability. Corresponding changes were made in section 11AB which with effect from 11.5.2001 which would cover all cases of unpaid interest, be it for the reason of fraud, collusion, etc. or the rest. 24. The circular dated 26.8.2002 of the CBEC was issued specifically in the background of section 11AB of the Act and clarified that the provisions would apply only to cases where liability to pay the duty arose after insertion of the said section and would not cover the cases where though liability might have arisen, the determination took place later. This was in consonance with the clarificatory provision contained in subsection (2) of section 11AB which does not find place in section 11AA. Neither the circular was meant to cover section 11AA nor the language used in section 11AA would permit us to apply such a clarification which was meant for section 11AB of the Act. 25. Under the circumstances, the petition is dismissed.