Extended limitation cannot rest on unchallenged allegations of record manipulation; differential duty demand and penalty were set aside.

Manipulation of records could not be relied on in de novo adjudication to invoke the extended period of limitation or sustain the differential duty demand and penalty under Notification No. 4/97-CE, because the earlier remand order had already found that allegation unsupported by adequate evidence and required inclusion of brokes readings for eligibility. Since that finding was not challenged by the Revenue, the adjudicating authority could not reuse the same basis to justify the demand. The differential duty demand and penalty were therefore set aside, and the assessee obtained relief.

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Issues: Whether the differential duty demand and penalty could be sustained in de novo adjudication on the basis of alleged manipulation of records and suppression of facts so as to invoke the extended period of limitation under Notification No. 4/97-CE dated 1.3.1997.

Analysis: The earlier remand order had already held that the allegation of manipulation of records was not supported by adequate evidence and that the department had to include the brokes readings while determining eligibility under the notification. In the de novo proceedings, the adjudicating authority nevertheless relied on the same allegation of manipulation to justify the restricted demand and penalty. Since the earlier finding on manipulation had not been challenged by the Revenue, the same basis could not be used again to invoke the extended period or sustain the demand.

Conclusion: The differential duty demand and the penalty were not sustainable and were set aside.

Final Conclusion: The appeal succeeded and the assessee obtained relief from the duty demand and penalty.

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