Extended limitation barred where duty was revenue neutral and no intent to evade duty was found, defeating interest and penalty.

The extended period of limitation cannot be invoked to sustain interest and penalty where the duty situation is revenue neutral or the record shows no intent to evade duty. Here, one matter was revenue neutral because duty paid by one unit was available as CENVAT credit to another, and in the other the appellate authority had itself found non-compliance with the valuation rules but no intention to evade payment. On those facts, the jurisdictional basis for extended limitation was absent, and the demands of interest and penalty were unsustainable.

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Issues: Whether the extended period of limitation could be invoked for demanding interest and penalty where the duty situation was revenue neutral and no intent to evade payment of duty was found.

Analysis: In one appeal, the duty paid by Unit-II was available as CENVAT credit to Unit-I, making the situation revenue neutral. In the other appeal, the appellate authority itself recorded that non-compliance with Rule 8 of the Valuation Rules had occurred, but the intent to evade payment of duty did not exist. On these facts, the basis for invoking the extended period of limitation was absent in both matters.

Conclusion: The extended period of limitation was not invokable, and the demands of interest and penalty were unsustainable.

Ratio Decidendi: Where the duty demand is revenue neutral or the adjudicating authority records absence of intent to evade duty, the extended period of limitation cannot be invoked to sustain interest and penalty.

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