Limitation bars a later duty demand where the Revenue already knew of the alleged irregular credit and investigation had ended

A demand notice issued in 1999 for credit availed in 1995 was held time-barred because the Revenue was already aware of the alleged irregular credit in 1996 through proceedings against the supplier, where the appellant's name and the relevant amount were specifically recorded. Since the investigation was treated as concluded in 1996 and no material showed it remained pending thereafter, the later notice fell outside the limitation period governing recovery of duty demand. The impugned demand and the confirming appellate order were set aside, with consequential relief in favour of the assessee.

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Issues: Whether the demand notice issued in 1999 for credit availed in 1995 was barred by limitation.

Analysis: The record showed that the Revenue was already aware in 1996 of the alleged irregular credit through the earlier proceedings against the supplier, and the appellant's name and the relevant amount were specifically reflected there. The investigation was treated as having concluded in 1996, with no material showing that it remained pending thereafter. In these circumstances, the later notice issued in 1999 was beyond time and could not be sustained under the limitation framework governing recovery of duty demand.

Conclusion: The demand was held to be time-barred and unsustainable, in favour of the assessee.

Final Conclusion: The impugned demand and the appellate order confirming it were set aside, with consequential relief to follow.

Ratio Decidendi: Where the Revenue had knowledge of the alleged irregularity and the investigation had already culminated, a subsequent demand notice issued after the limitation period is barred and cannot be sustained.

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