Wrongful notification benefit and extended customs limitation require proof of facts, notice service, and supporting material.

Demand of duty based on alleged wrongful availment of Notification No. 203/92 requires a factual foundation; where the record does not show that Modvat credit was availed in manufacture of the exported product, and the Department had already cleared the goods with knowledge of the condition, the demand cannot be supported. The extended limitation under the proviso to Section 28(1) of the Customs Act also requires proof of service of the show cause notice and material justifying its invocation; an unrebutted affidavit denying receipt, without contrary evidence from the Department, is insufficient. The note treats both deficiencies as fatal to the demand and limitation claim.

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Issues: (i) Whether the demand of duty could be sustained on the allegation that the benefit of Notification No. 203/92 had been wrongly availed. (ii) Whether the extended period under the proviso to Section 28(1) of the Customs Act, 1962 could be invoked in the absence of proof of service of the show cause notice and supporting material.

Issue (i): Whether the demand of duty could be sustained on the allegation that the benefit of Notification No. 203/92 had been wrongly availed.

Analysis: The impugned order did not disclose any basis for the finding that Modvat credit had been availed in the manufacture of the exported product. The benefit of the notification had already been granted and the goods had been cleared by the Department, which was aware of the relevant condition. No material was shown to establish that the earlier clearance was erroneous.

Conclusion: The demand based on alleged wrongful availment of the notification benefit was not sustainable.

Issue (ii): Whether the extended period under the proviso to Section 28(1) of the Customs Act, 1962 could be invoked in the absence of proof of service of the show cause notice and supporting material.

Analysis: The appellant's assertion of -receipt of the show cause notice was supported by affidavit and remained unrebutted despite opportunities given to the Department. No material was produced to show service of notice or to justify invocation of the extended period under the proviso to Section 28(1).

Conclusion: The extended period of limitation could not be invoked.

Final Conclusion: The impugned order was not sustainable in law and was set aside, resulting in allowance of the appeal.

Ratio Decidendi: A demand under the extended period cannot be sustained without proof of service of the show cause notice and without material establishing the factual basis for the proposed duty demand or the alleged misuse of the notification benefit.

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