Fresh show cause notice with materially different tariff classification was time-barred and unsustainable.

A later show cause notice that proposed a different tariff classification was treated as a fresh notice because it materially changed the basis of the demand rather than merely clarifying the earlier case. The earlier notice had proposed reclassification under Tariff Heading 85.15, but the department issued the later notice after about a decade with new classifications. On that footing, the later notice could not be treated as a continuation of the earlier notice, and the resulting duty demand was held time-barred.

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Issues: Whether the later show cause notice proposing a different tariff classification was a fresh notice involving a material change, and whether the resulting demand of duty was barred by time.

Analysis: The earlier notice proposed a definite reclassification under Tariff Heading 85.15. After the assessee's reply, the department waited for about a decade and then issued another notice proposing different classifications. The change in the later notice was not merely formal but substantially altered the basis of the demand. On that footing, the later notice could not be treated as a continuation of the earlier one and had to be regarded as a fresh notice. As it was issued well beyond the permissible period, the demand raised under it could not be sustained.

Conclusion: The later show cause notice was treated as a fresh and materially different notice, and the demand of duty was held to be time-barred, in favour of the assessee.

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