Limitation under Customs Act bars demand and penalty where show cause notice is issued after expiry of the prescribed period.

Duty-free clearance of brass scrap under advance licences remained subject to a fixed export obligation period, and the bond could be enforced only within the prescribed limitation period after that period expired. Because the show cause-cum-demand notice was issued after expiry of the statutory period, the customs demand was barred by limitation under Section 28 of the Customs Act. The consequential penalty also could not be sustained.

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Issues: Whether the demand of customs duty and the consequential penalty were barred by limitation under Section 28 of the Customs Act.

Analysis: The imported brass scrap had been cleared duty free against advance licences subject to fulfilment of export obligation within the stipulated period. The Court noted that the export obligation period was fixed and limited, and the bond could be enforced within the prescribed period after such obligation period expired. The case did not involve any continuous and open-ended obligation of the kind considered in the cited precedent. The show cause-cum-demand notice was issued after the expiry of the statutory period, so the demand could not be sustained within limitation.

Conclusion: The demand was time-barred, and the duty as well as the penalties could not be confirmed.

Ratio Decidendi: Where export obligation is fixed for a definite period and the bond is enforceable only within the prescribed limitation period, a show cause notice issued beyond that period is barred by limitation under Section 28 of the Customs Act.

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