Duty recovery on short levy applies the rules in force when proceedings begin, and may avoid limitation where no assessment existed.

Recovery of duty for short levy or non-levy was tested by reference to the rules in force when proceedings were initiated, not the rules applicable to the earlier period. On that basis, substitution of the old rules did not invalidate the show cause notice or the demand. The material period was also treated as falling under Rule 10-A because there was no initial assessment, and that provision carried no prescribed limitation period. The demand was therefore treated as maintainable and not barred by limitation.

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Issues: Whether the demand for duty could be sustained when the show cause notice was issued after substitution of the old rules and whether the demand was barred by limitation.

Analysis: The dispute turned on whether recourse for recovery of duty had to be tested with reference to the rules in force on the date to which the demand related or the rules prevailing on the date of initiation of proceedings. The Tribunal followed the principle that, for a show cause notice relating to short levy or non-levy, the relevant provisions are those prevailing when the proceedings are initiated. On that basis, the invocation of the new rule did not invalidate the demand. The Tribunal also accepted the Collector (Appeals)' view that, in the absence of an initial assessment, recovery lay under Rule 10-A during the material period and that no time limit was prescribed under that provision.

Conclusion: The demand was held to be valid and not time-barred.

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