Limitation barred central excise demand and consequential penalty where extended period was unavailable on the facts.

CEGAT held that the extended limitation period under the proviso to Section 11A(1) was not available on the facts, so the central excise duty demand could not survive beyond the normal limitation period. As the show cause notice was issued after the relevant period and the prior factual findings in the appellants' own case applied, the demand was time-barred and set aside. The penalty, being consequential to the demand, was also set aside.

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Issues: Whether the demand of central excise duty and the consequential penalty were barred by limitation.

Analysis: The demand related to the period January 1981 to November 1985, while the show cause notice was issued on 31 December 1986. The Tribunal held that the extended period under the proviso to Section 11A(1) was not available on the facts as noticed in the earlier order in the appellants' own case, and therefore the demand could not survive beyond the normal limitation period. The penalty, being dependent on the demand, also could not be sustained.

Conclusion: The demand was held to be time-barred and was set aside. The penalty was also set aside as consequential.

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