Limitation on tax demand: later show-cause notice held time-barred after an earlier notice on the same issue.

A subsequent show-cause notice was held time-barred where an earlier notice on the same issue and for the same period had not invoked the extended period of limitation. The Tribunal treated the Commissioner (Appeals)' limitation finding as consistent with the Supreme Court ruling in L.H. Sugar Factories Ltd. and with similar CESTAT decisions, including Ghataprabha Sahakari Sakkare Karkhane Niyamit and Durairaj Mills Ltd. On that basis, the later demand was unsustainable, and the revenue appeal failed.

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Issues: Whether the demand was barred by limitation and the subsequent show-cause notice was unsustainable in the light of the earlier settled position.

Analysis: The appeal turned on the limitation objection accepted by the Commissioner (Appeals), who held that a prior notice on the same issue and for the same period had not invoked the extended period and that the later notice was therefore hit by time bar. The Tribunal noted that the Commissioner (Appeals) had applied the ratio of the Supreme Court decision in L.H. Sugar Factories Ltd. and that the same approach had been followed in identical matters, including the decision in Ghataprabha Sahakari Sakkare Karkhane Niyamit and the Chennai Bench ruling in Durairaj Mills Ltd. The Tribunal found those rulings applicable to the facts before it.

Conclusion: The demand was correctly held to be barred by limitation and the revenue appeal failed.

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