Customs demand fails for lack of foundational evidence, as the notice omitted import particulars and verified short-levy material.

A customs demand and penalty based on alleged breach of Notification No. 203/92-Cus and presumed input credit were found unsustainable because the show cause notice and adjudication order lacked foundational material linking the imports to any verified short payment of duty. The notice did not disclose bill of entry particulars, the source of information relied on, or proper scrutiny supporting non-compliance. The basis for invoking the extended period was also absent, and the demand was traced only to licence data rather than a verified short levy. The demand and penalty were set aside.

---

---

Issues: Whether the demand and penalty based on alleged non-compliance with Notification No. 203/92-Cus and presumed availment of input credit could be sustained when the show cause notice and adjudication order did not contain the foundational material linking the imports to any verified short-payment of duty.

Analysis: The demand was purportedly raised under section 28 of the Customs Act, 1962 on the premise that credit under the Central Excise Rules had been availed and that the licence condition under the notification was breached. However, the notice and the adjudication order did not disclose the bill of entry particulars, the source of the information relied upon, or any proper scrutiny leading to the conclusion of non-compliance. The foundation for invoking the extended period was also found lacking, and the quantified demand was traced merely to licence data rather than to any verified assessment-related short levy. These defects were treated as fundamental and incapable of cure.

Conclusion: The demand and penalty were unsustainable and were set aside in favour of the assessee.

---