Limitation barred the show cause notice, so the resulting demand and penalty could not survive.

A show cause notice demanding reversal-related amount was found unsustainable because it had been issued beyond the normal limitation period. The Tribunal treated limitation as fatal to the notice, with the result that the consequential demand and penalty could not survive. The demand was therefore set aside in favour of the assessee.

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Issues: Whether the show cause notice demanding reversal-related amount was barred by limitation and therefore unsustainable.

Analysis: The Tribunal found that the grounds raised in appeal clearly established that the notice was issued beyond the normal period and was hit by limitation. On that basis, the notice could not be sustained. Once the notice failed on limitation, the consequential orders confirming demand and penalty also could not survive.

Conclusion: The show cause notice was held to be not sustainable as it was barred by limitation, and the demand was set aside in favour of the assessee.

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