Limitation in review proceedings: duty-demand revival was time-barred, while confiscation and penalty survived within time.

In review proceedings under Section 36(2) of the Central Excises and Salt Act, the shorter limitation under the third proviso applied where the review sought to revive a confirmed demand of short-levied duty that had been set aside in appeal, so that portion of the notice was time-barred. For confiscation and penalty, the notice fell within the one-year period under the second proviso, because those aspects were also set aside by the appellate order and the review was issued within time. The duty-demand component could not be sustained on limitation, but the confiscation and penalty component survived for consideration on merits.

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Issues: (i) Whether the review show cause notice issued under Section 36(2) of the Central Excises and Salt Act was barred by limitation in so far as it sought to sustain the demand of short-levied duty. (ii) Whether the same notice was within time in relation to confiscation and penalty.

Issue (i): Whether the review show cause notice issued under Section 36(2) of the Central Excises and Salt Act was barred by limitation in so far as it sought to sustain the demand of short-levied duty.

Analysis: The review proceedings related to an appellate order which had set aside a confirmed demand of duty short levied under the original show cause notice. The controlling question was whether the third proviso to Section 36(2), and not the second proviso, applied. The notice under review plainly concerned the legality and correctness of the appellate order insofar as it affected the confirmed duty demand, and the notice was issued beyond the shorter period prescribed for such review. The absence of an express statement that the earlier adjudication would be restored did not take the proceedings outside the third proviso, because the substance of the review was to revive the duty demand that had been set aside.

Conclusion: The review show cause notice was barred by limitation in respect of the duty demand, and that portion could not be sustained.

Issue (ii): Whether the same notice was within time in relation to confiscation and penalty.

Analysis: The original proceedings also involved confiscation of goods and imposition of penalty, and the appellate order had set those aside as well. For those aspects, the relevant limitation was the one-year period under the second proviso to Section 36(2). The review notice had been issued within one year from the appellate order. Accordingly, the challenge based on limitation failed in relation to confiscation and penalty, even though the duty-demand portion was time-barred.

Conclusion: The notice was within time for confiscation and penalty, and that part of the review proceedings could proceed.

Final Conclusion: The duty-demand part of the review proceedings failed on limitation, while the confiscation and penalty part survived and was left for merits consideration.

Ratio Decidendi: In review proceedings under Section 36(2) of the Central Excises and Salt Act, the shorter limitation under the third proviso applies where the appellate order under challenge concerns a confirmed demand of short-levied duty, whereas confiscation and penalty aspects are governed by the general limitation under the second proviso.

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