Limitation in customs recovery: demand failed where no suppression was alleged and the extended period lacked basis.

A customs demand was held time-barred because the show cause notice was issued more than two years after import, beyond the normal one-year recovery period under Section 28 of the Customs Act, 1962 in the circumstances noted. The notice did not allege suppression of facts, and the record disclosed no material showing suppression with intent to evade duty. As the impugned order contained no discussion on limitation and no basis for invoking the extended period, the demand could not be sustained. The finding was in favour of the assessee.

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Issues: Whether the demand confirmed under the impugned order was sustainable in law on the ground of limitation.

Analysis: The SCN was issued more than two years after the imports, while the normal period for recovery under Section 28 of the Customs Act, 1962 was one year in the circumstances noted. The SCN did not allege suppression of facts, and there was no material to show suppression with intent to evade duty. The impugned order also contained no discussion on limitation, and the basis for invoking the extended period was absent.

Conclusion: The demand was barred by limitation and could not be sustained; the finding is in favour of the assessee.

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