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Issues: (i) Whether the extended period of limitation could be invoked for confirming the duty demand; and (ii) whether penalty was sustainable when the duty demand itself was time-barred.
Issue (i): Whether the extended period of limitation could be invoked for confirming the duty demand.
Analysis: The same period and the same basis had already been the subject of an earlier show cause notice, which did not allege wilful misstatement, suppression of facts, or contravention with intent to evade duty. The later notice did not bring any fresh material to justify a finding of suppression or deliberate non-declaration. The relevant records, including RT-12 returns and gate passes, were already available to the Revenue and the demand could have been raised within the normal period.
Conclusion: The extended period of limitation was not available and the duty demand was barred by time.
Issue (ii): Whether penalty was sustainable when the duty demand itself was time-barred.
Analysis: Once the duty demand was found to be time-barred, there remained no independent foundation for sustaining the penalty. The facts did not disclose any separate basis warranting penal action.
Conclusion: The penalty was not sustainable and was set aside.
Final Conclusion: The demand of duty and the penalty were both annulled, leaving the assessee successful in the appeal.
Ratio Decidendi: Where the Revenue relies on the same disclosed material already within its possession and no fresh evidence shows suppression or wilful misstatement, the extended period of limitation cannot be invoked, and any penalty founded on such time-barred demand cannot survive.
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