Extended limitation for customs demand rejected; demand confined to normal period and penalty under Section 114A set aside.

Extended limitation for the demand on imports of optical fibre cables was found unwarranted because the show-cause notice covered clearances beyond the normal period and the dispute was confined to limitation. The classification controversy was not pressed in the appeal, and the Tribunal followed its consistent approach in similar matters, including the pending Larger Bench reference on the same issue. The demand was therefore restricted to the normal period of limitation, and the penalty linked to the extended demand under Section 114A was set aside in favour of the assessee.

---

---

Issues: Whether the demand raised for the period beyond the normal limitation period was sustainable and whether the penalty imposed could survive.

Analysis: The demand arose from imports of optical fibre cables for a period covered by a show-cause notice issued after the relevant clearances. The classification issue was not pressed for decision in this appeal, and the dispute was confined to limitation. In view of the earlier Larger Bench reference on the same classification controversy and the Tribunal's consistent approach in similar matters, invocation of the extended period was held to be unwarranted. The demand was therefore confined to the normal period of limitation, and the penalty linked to the extended demand could not be sustained.

Conclusion: The extended period of limitation was disallowed, the demand was restricted to the normal period, and the penalty under Section 114A was set aside, in favour of the assessee.

---