Second demand notice barred without fresh material; uncorroborated buyer balance sheet cannot sustain suppression-based duty demand.

A second demand notice for the same period and amount was unsustainable where the earlier demand had already been dropped, no fresh material had emerged, and no suppression of facts was proved; the extended limitation period therefore could not be invoked and the repeated proceedings offended against parallel adjudication of the same matter. A demand also could not be based solely on the principal buyer's balance sheet without corroborating documents or independent evidence of undervaluation or suppression. The demand, along with penalty, confiscation and redemption fine, was set aside and the appeal was allowed.

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Issues: (i) Whether the second show cause notice and consequent demand for the same period and amount were barred by res judicata, absence of suppression of facts, and limitation. (ii) Whether a demand could be sustained merely on the basis of the balance sheet of the principal buyer.

Issue (i): Whether the second show cause notice and consequent demand for the same period and amount were barred by res judicata, absence of suppression of facts, and limitation.

Analysis: The earlier proceedings for the same period and same amount had already resulted in dropping of the demand, and the Revenue's appeal against that order remained pending. The second notice was founded on the same material, with no new development or fresh evidence having emerged after the first proceedings. On these facts, no suppression of facts was established and invocation of the extended period was not justified. The repeated initiation of proceedings on the same cause was also held to offend the principle against parallel adjudication of the same matter.

Conclusion: The second proceedings were not maintainable on the same facts and period, and the demand was barred by limitation.

Issue (ii): Whether a demand could be sustained merely on the basis of the balance sheet of the principal buyer.

Analysis: The demand was based only on the balance sheet of the principal buyer, without supporting new documents or independent evidence showing under-valuation or suppression by the appellants. In the absence of corroboration, such material was held insufficient to sustain the demand.

Conclusion: The demand could not be sustained merely on the basis of the balance sheet.

Final Conclusion: The order confirming demand, penalty, confiscation and redemption fine was set aside and the appeal was allowed.

Ratio Decidendi: A second demand notice for the same period and amount cannot be sustained in the absence of fresh material or proved suppression of facts, and a demand cannot rest solely on an uncorroborated balance sheet.

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