Continuation of excise demand proceedings after vacation of stay defeated the limitation challenge to the revived notice.

Duty liability had already been asserted and the product had been treated as fabric since 1975; interim writ orders only restrained collection and implementation of that classification. When the writ petitions were dismissed and the stay was vacated, the department revived the earlier excise demand, and the later notice was treated as a continuation of the original proceedings rather than a fresh demand. On that basis, the ordinary limitation period for a new show cause notice did not apply, the demand was held not time-barred, and the challenge on limitation failed.

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Issues: Whether the demand for duty raised after the vacation of the High Court's interim stay was barred by limitation under the excise demand provisions, or whether the later notice was merely a continuation of the earlier proceedings and outside the normal limitation bar.

Analysis: The product had already been put to notice as early as 1975 that it was being treated as fabric, and the subsequent writ petitions only resulted in interim restraint on collection and implementation of that classification. The earlier demand proceedings were kept in abeyance during the pendency of the stay, and after dismissal of the writ petitions and vacation of the stay, the department revived the demand on the basis that the classification issue had already been finally settled. In that situation, the later notice was treated as a continuation of the earlier demand proceedings and not as an independent fresh demand attracting the normal limitation bar under the excise demand provisions.

Conclusion: The demand was not barred by limitation and the challenge on that ground failed.

Final Conclusion: The appeal was rejected and the departmental demand was upheld.

Ratio Decidendi: Where duty liability and classification have already been asserted and further proceedings are restrained only by an interim court order, a later demand issued after vacation of the restraint may be treated as a continuation of the earlier proceedings and need not be defeated by the ordinary limitation period applicable to a fresh show cause notice.

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