Customs duty recovery barred by limitation where clearance followed licence verification and no suppression was shown.

Differential customs duty recovery was considered unsustainable where imports were cleared after customs examined the advance licence and extended exemption benefit, and the later notice was issued only after clearance on an allegation of suppression. The record showed that both the importers and the department proceeded on the same understanding that compliance with the value restriction was sufficient, with no material indicating misstatement or concealment by the importers. On that basis, the demand was treated as barred by limitation, and the proposed penalties on the importing firms' employees and the broker also failed for want of a valid foundation.

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Issues: Whether the differential customs duty demand and consequential penalties were sustainable when the imports had been cleared after examination of the advance licence and the notice was issued after clearance on an allegation of suppression.

Analysis: The goods had been assessed after the customs authorities examined the licence and extended the benefit of Notification No. 79/95-Cus. On the record, both the importers and the department proceeded on the same understanding that compliance with the value restriction was sufficient, and there was no material showing suppression or misstatement by the importers. In these circumstances, the later notice seeking to recover duty by disputing the licence conditions was held to be barred by limitation, and the foundation for penalties on the employees of the importing firms and the broker also failed.

Conclusion: The demand of differential duty with interest was held unsustainable as time barred, and the penalties were not justified.

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