Invalid show cause notice and no suppression bar extended limitation for duty demand

A peremptory direction to pay duty is not a valid show cause notice because it does not call upon the assessee to answer the case or defend itself. Where the proper notice was issued only after the limitation period had expired, the duty demand was barred by limitation. An incorrect classification declaration, without a charge of wrong or incomplete description or other suppression of facts, does not by itself justify invocation of the extended period; classification remains the function of the assessing officer. The extended limitation period was therefore unavailable.

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Issues: Whether the duty demand was barred by limitation for want of a valid show cause notice under Rule 10 read with Section 11A, and whether an incorrect classification declaration amounted to suppression so as to justify invocation of the extended period.

Analysis: The initial communication was only a peremptory direction to pay duty and did not call upon the assessee to show cause or afford an opportunity of defence. A show cause notice in the manner required by law was issued only later, beyond the prescribed period. The incorrect classification made by the assessee did not, by itself, establish misdescription of goods or suppression of facts. Classification is the function of the assessing officer, and in the absence of a charge of wrong or incomplete description, the extended period could not be applied.

Conclusion: The demand was barred by limitation, the extended period was unavailable, and the appeal failed.

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