Meter jumping and prior duty payment defeated the duty demand, with interest and penalty also falling away.

Duty demand on the quantity allegedly cleared was unsustainable where the disputed quantity was attributable to meter jumping and duty had already been paid on the entire quantity received. On that factual basis, the related demand could not be maintained, and the consequential interest and penalty also failed with it. The impugned orders were set aside in favour of the assessee.

---

---

Issues: Whether the duty demand on the quantity allegedly cleared, along with consequential interest and penalty, was sustainable when the quantity was said to be the result of meter jumping and duty had already been paid on the entire quantity received.

Analysis: The quantity in dispute was found to be attributable to meter jumping rather than actual clearance. Since duty had already been paid on the entire quantity received by the assessee, the demand raised on the disputed quantity lacked sustainability. Once the duty demand failed, the consequential levy of interest and penalty also could not survive.

Conclusion: The duty demand, interest, and penalty were held unsustainable and the impugned orders were set aside in favour of the assessee.

---