Limitation for duty demand under Rule 96E restricted where non-power unit status was not verified before removal.

Permission under Rule 96E had been obtained before removal of cotton yarn to non-power operated units, and the procedural scheme required verification and bonds from both consignor and consignee under Rules 153B, 156A and 156B. Because the recipient units were in fact non-power operated, the failure to verify that status at the permission stage could not be attributed solely to the appellants. On that footing, the extended demand could not be sustained in full, and the portion of duty beyond the normal limitation period was time-barred. The demand was therefore upheld only for the restricted period.

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Issues: Whether the demand of duty on cotton yarn sent to non-power operated units under Rule 96E was barred by limitation, and whether the demand could be sustained beyond six months.

Analysis: Permission under Rule 96E was obtained before removal of the cotton yarn, and the procedural requirements contemplated verification and execution of bonds by both consignor and consignee under Rules 153B, 156A and 156B. The record showed that the recipient units were non-power operated, and the failure to verify that fact at the stage of granting permission could not be laid solely at the appellants' door. In these circumstances, the extended demand could not be upheld in full, and the portion of duty beyond the normal limitation period was liable to be treated as time-barred.

Conclusion: The demand beyond six months was barred by limitation and was set aside to that extent, while the demand was sustained only for the restricted period.

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