Supplementary invoice after completed exports did not create duty liability, and the demand was also time-barred.

Duty could not be demanded on a supplementary invoice issued after exports were completed and rebate had already been sanctioned, because the export price was only tentative and subject to post-account finalisation; the goods were therefore not undervalued at the time of export and no suppression or intent to evade duty was shown. As the underlying duty demand failed, interest on the differential amount also could not be sustained. The notice was additionally held to be time-barred, so the demand for duty and interest was rejected in favour of the assessee.

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Issues: Whether duty or interest was payable on a supplementary invoice raised after completion of export under claim of rebate, and whether the demand was barred by limitation.

Analysis: The export had already been completed and rebate had been sanctioned. The price under the export agreement was tentative and was liable to adjustment only after finalisation of accounts, so the goods were not undervalued at the time of export and there was no suppression or intention to evade duty. In such circumstances, the subsequent supplementary invoice did not create a fresh duty liability on completed exports. Since the duty itself was not payable, no interest could be demanded on the differential amount. The notice was also held to be beyond time.

Conclusion: The demand of duty and interest on the supplementary invoice was unsustainable and the plea of limitation succeeded in favour of the assessee.

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