Short-levy excise recovery must follow the specific limitation rule, and settled assessment practice can bar reopening.

A short-levy excise duty demand must be pursued under the specific recovery provision governing short levy, not the residuary rule, and limitation under the specific rule applies. On the facts described, the alleged short levy arose from inadvertence or mis-construction in earlier assessment, so the demand notices issued under Rule 10A were unsustainable once the Rule 10 period had expired. The text also states that where assessments followed a settled departmental practice reflected in circulars and trade notices, and the assessee altered its position on that basis, the revenue is precluded from reopening the assessments inconsistently with that practice.

---

---

Issues: (i) Whether the impugned demand notices issued under Rule 10A were without jurisdiction because the case was governed by Rule 10 and the limitation under that rule had expired; (ii) Whether the revenue was precluded from reopening the assessments in view of the settled assessment practice and the representations on which the assessee had acted.

Issue (i): Whether the impugned demand notices issued under Rule 10A were without jurisdiction because the case was governed by Rule 10 and the limitation under that rule had expired.

Analysis: The short-levy alleged in the notices arose from the manner in which duty had earlier been assessed on wrapping paper used for packing and on reel cores. The governing principle is that where a case is covered by Rule 10, the residuary provision in Rule 10A cannot be used. The Court held that the revenue's own case, even if accepted, disclosed a short-levy caused by inadvertence, error, or mis-construction in the assessment process, which falls within Rule 10. Since the notices were issued beyond the period prescribed by Rule 10, they could not be sustained under Rule 10A.

Conclusion: The notices were barred by limitation and were without jurisdiction in so far as they were issued under Rule 10A.

Issue (ii): Whether the revenue was precluded from reopening the assessments in view of the settled assessment practice and the representations on which the assessee had acted.

Analysis: The assessee had been assessed under an established practice reflected in departmental circulars and trade notices, and had altered its position on that basis. The Court treated the prior assessment method as a settled basis on which the assessee had acted to its detriment. In those circumstances, the revenue could not resile from the earlier procedure and reopen the assessments in the manner attempted by the impugned notices.

Conclusion: The revenue was estopped and precluded from reopening the assessments in the manner sought.

Final Conclusion: The impugned notices were quashed and the revenue was restrained from proceeding on them, so the assessee succeeded in obtaining relief against the attempted recovery.

Ratio Decidendi: A demand for short-levied excise duty must be pursued under the specific recovery provision governing short levy, and the residuary recovery power cannot be used to bypass that provision or its limitation; where an assessee has acted on a settled departmental assessment practice and altered its position accordingly, the revenue cannot reopen the assessments inconsistently with that practice.

---