Rule 10 limitation bars retrospective excise demand where earlier assessment was departmentally directed and later levy reflects only a change of opinion.

Differential excise duty on aluminium foil scrap could not be recovered retrospectively under Rule 10 of the Central Excise Rules, 1944 where the earlier assessment had been made under departmental directions and the later demand reflected only a change of opinion rather than a true short levy. The demand notice was also invalid because the fresh demand covered a period beyond the six-month limitation under Rule 10 and was not duly confirmed in the manner required by law. Recovery for the past period was therefore barred, while assessment at the crude rate from the date of the trade notice remained undisturbed.

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Issues: Whether the demand for differential excise duty on aluminium foil scrap for the past period was recoverable under Rule 10 of the Central Excise Rules, 1944, and whether the impugned demand notice was valid.

Analysis: The demand for the earlier period was founded not on any discovery of a true short levy arising from an erroneous assessment, but on repeated changes in departmental classification and a later change of view. The assessment prior to the trade notice was itself made under departmental directions after discussion, so the later attempt to recover duty retrospectively was not supported as a case of short levy. The notice issued on 1-4-1978 was not itself a proper demand notice, and the fresh demand issued pursuant to the Assistant Collector's direction covered a period that was beyond the six-month limit under Rule 10. The demand also remained unconfirmed in the manner required by law.

Conclusion: The past-period demand was not sustainable under Rule 10 and was time-barred and invalid. The assessee succeeded on this issue.

Final Conclusion: Recovery of differential duty for the earlier period was barred, while the assessment at crude rate from the date of the trade notice was left undisturbed.

Ratio Decidendi: A demand under Rule 10 of the Central Excise Rules, 1944 cannot be sustained for a past period where the earlier assessment was made under departmental directions and the later levy represents only a change of opinion, especially when the demand is beyond the prescribed limitation and is not duly confirmed.

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