Extended-period differential duty demand fails once the underlying classification issue is decided for the assessee

An extended-period demand for differential duty could not be sustained where the underlying classification dispute had already been resolved in favour of the assessee. The Tribunal noted that the goods were held classifiable under Tariff Item 26AA(ia), so the foundational basis for the differential duty claim no longer survived. On that footing, the extended-period demand was treated as unsustainable.

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Issues: Whether the demand for differential duty for the extended period could survive when the classification dispute underlying the demand had already been decided in favour of the assessee.

Analysis: The Tribunal noted that the appeal concerned only the demand for differential duty for the extended period. It further noted that the foundational question of classification of the goods had already been decided against the Revenue, with the goods held classifiable under Tariff Item 26AA(ia). Once that finding stood, the basis for demanding differential duty disappeared, and there was no occasion to sustain an extended-period demand.

Conclusion: The demand for differential duty for the extended period was unsustainable and the appeal was dismissed.

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