Limitation bars prima facie excise demand and supports unconditional waiver of pre-deposit even under the Central Excise Rules.

A pre-deposit waiver was granted because the duty demand was raised after the applicable limitation period. The demand covered January 2001 to September 2002, but the show cause notice was issued only on 5 February 2008, placing it beyond even the extended five-year period on the facts presented. The Tribunal also noted that, although the demand was sought to be sustained under the Central Excise Rules rather than only under section 11A, the limitation principle was treated as applicable to Rule 196 as well. On that basis, the demand could not be prima facie sustained and unconditional waiver of pre-deposit was allowed.

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Issues: Whether the appellant was entitled to unconditional dispensation of the pre-deposit requirement on the ground that the duty demand appeared to be barred by limitation, including under the extended period, even though the demand was sought to be sustained under the Central Excise Rules.

Analysis: The demand related to the period January 2001 to September 2002, while the show cause notice was issued only on 5 February 2008. On the facts placed before it, the Tribunal found that the demand was beyond even the extended period of five years. It also noted that the demand, though raised under Section 11A, was sought to be confirmed under Rule 192 read with Rule 196, and that the judicial view relied upon by the appellant treated the limitation principle as applicable even to Rule 196. In that view, the demand could not be prima facie upheld.

Conclusion: The appellant was entitled to unconditional waiver of pre-deposit and the stay petition was allowed.

Ratio Decidendi: A duty demand cannot be prima facie sustained where it is raised beyond the applicable limitation period, and the limitation principle applies even when the demand is sought to be made under the Central Excise Rules.

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