Extended duty demand needs specific evidence for the later period; penalty based on the same unsupported demand also fails.

Duty demand for a period beyond 20-08-1985 could not be sustained where the show cause notice relied only on the same search record and statements already used in earlier proceedings, with no independent evidence of clandestine clearances for the later period. The extended demand was therefore set aside. Penalty also failed because it rested on the same unsupported allegation of post-20-08-1985 removals, and once the demand for the later period was unsustainable, no separate basis remained for additional penalty. The stated principle is that an extended duty demand must be supported by substantive evidence specific to that period, and a penalty based on the same deficient demand cannot survive.

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Issues: (i) Whether duty could be demanded for the period beyond 20-08-1985 on the basis of the material relied upon in the show cause notice. (ii) Whether the penalty imposed on the appellant was sustainable.

Issue (i): Whether duty could be demanded for the period beyond 20-08-1985 on the basis of the material relied upon in the show cause notice.

Analysis: The original proceedings had already concluded in respect of the period up to 20-08-1985. For the later period, the fresh notice relied on the same search record and the same statements, with no additional evidence showing clandestine clearance after 20-08-1985. In the absence of independent material covering the extended period, duty could not be fastened beyond the period already covered by the earlier proceedings.

Conclusion: The demand for duty beyond 20-08-1985 was not sustainable and was set aside.

Issue (ii): Whether the penalty imposed on the appellant was sustainable.

Analysis: The penalty had already been levied in the original proceedings for the earlier period, and no further sustainable charge remained for any post-20-08-1985 removal. Once the extended demand failed for want of evidence, the basis for any additional penalty also disappeared.

Conclusion: The penalty was not sustainable and was set aside.

Final Conclusion: The appellant succeeded, with the demand restricted to the concluded earlier period and no surviving basis for further duty or penalty for the later period.

Ratio Decidendi: A duty demand for an extended period cannot be sustained unless the department adduces substantive evidence specifically supporting clearances during that period, and a penalty founded on the same unsupported demand must also fail.

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