Rule 10 limitation applies to short levy notices; residuary Rule 10A cannot sustain a time-barred demand.

A demand notice arising from a nil assessment and exemption endorsement was governed by Rule 10 of the Central Excise Rules, 1944, because the case involved short levy through error or misconstruction rather than a situation outside Rule 10. Rule 10A was only a residuary provision for matters not covered by Rule 10, so it could not sustain the demand. As the notice was issued beyond the prescribed recovery period under Rule 10, the demand was time-barred and liable to be set aside.

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Issues: Whether the demand notice was governed by Rule 10 or Rule 10A of the Central Excise Rules, 1944 and, if governed by Rule 10, whether it was barred by limitation.

Analysis: Rule 10 applied where duty had been short-levied through inadvertence, error, misconstruction, or misstatement, and carried a specific limitation period for recovery. Rule 10A was a residuary provision meant only for cases not falling within the scope of Rule 10. The notice in question arose from an assessment in which the authorities had applied the exemption and endorsed nil rate, so the case was one of short levy or nil assessment rather than no assessment at all. The demand therefore fell within Rule 10 and could not be sustained under Rule 10A. As the notice was issued beyond the prescribed period, the recovery was time-barred.

Conclusion: The notice and consequential demand were governed by Rule 10, were barred by limitation, and were liable to be set aside in favour of the assessee.

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