Limitation bars excise duty demand: payment after a time-barred demand does not validate it or waive challenge.

A duty demand barred by limitation under Section 11A of the Central Excises and Salt Act, 1944 cannot be sustained merely because the assessee paid it after the demand was raised. The demand covered duty for October 1980 to January 1981 but was issued only on 14-5-1982 without any allegation invoking the extended limitation period. Payment made in response to the demand was not voluntary and did not cure the defect of limitation or prevent the assessee from challenging the demand in appeal. The demand was therefore time-barred and unsustainable.

---

---

Issues: Whether a duty demand barred by limitation under Section 11A of the Central Excises and Salt Act, 1944 could be sustained merely because the assessee paid the amount after the demand was raised.

Analysis: The demand related to duty for October 1980 to January 1981 but was issued only on 14-5-1982 without allegation supporting the longer limitation period. The payment made by the assessee was not voluntary, but was made only in response to the demand. A time-barred demand does not become valid merely because the assessee complies with it and then challenges it in appeal. Treating such payment as curing the defect would unfairly deny relief to an assessee who meets the demand under protest.

Conclusion: The demand was barred by limitation and could not be sustained. The appeal succeeds in favour of the assessee.

Ratio Decidendi: A demand barred by limitation under Section 11A is not validated by payment made in response to that demand, and such payment does not preclude the assessee from challenging the demand.

---