Finality of bill of entry assessment bars collateral customs demand; extended limitation fails without wilful suppression or mala fide intent.

An assessed bill of entry that has not been challenged attains finality, so customs duty cannot be demanded indirectly through a show cause notice without first setting aside that assessment; the demand and proceedings were therefore unsustainable. The extended limitation period also could not be invoked because the notice alleged only wrongful availment of exemption benefit and did not plead wilful suppression of facts or mala fide intent to evade duty; the statutory ingredients for extended time were not established. The impugned orders were set aside and relief followed.

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Issues: (i) whether a show cause notice and consequent demand for customs duty could be sustained when the bill of entry assessment had not been challenged; (ii) whether the extended period of limitation could be invoked in the absence of allegations of wilful suppression or mala fide intent.

Issue (i): Whether a show cause notice and consequent demand for customs duty could be sustained when the bill of entry assessment had not been challenged.

Analysis: The bills of entry were assessed showing the SFIS holder's name, and the goods were cleared on that basis. The assessment order on the bill of entry remained unchallenged and therefore attained finality. In such circumstances, the duty demand could not be sustained by indirectly questioning the assessed bill of entry. The finding is consistent with the principle that an assessed bill of entry is an appealable order and cannot be ignored without first being set aside.

Conclusion: The demand and proceedings were not sustainable against the assessee on this ground.

Issue (ii): Whether the extended period of limitation could be invoked in the absence of allegations of wilful suppression or mala fide intent.

Analysis: The notice proceeded only on the footing that the benefit of Notification No. 91/09-Cus dated 11.09.2009 had been wrongly availed. It did not allege wilful suppression of facts or any mala fide intention to evade duty. On that basis, the ingredients necessary for invoking the extended limitation period were not established.

Conclusion: The extended period of limitation was not invokable against the assessee.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Where the assessment of a bill of entry has attained finality and no wilful suppression or mala fide intent is alleged, a demand cannot be sustained by collateral proceedings and the extended period of limitation cannot be invoked.

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