Retrospective capacity enhancement and time-barred duty demand fail where no suppression is shown under the limitation framework.

Retrospective enhancement of annual production capacity after an earlier joint verification was impermissible where the relevant facts were already before the Commissioner and no suppression by the assessee was shown. The later notice amounted in substance to a review of the prior determination and could not be sustained on the same material. A differential duty demand raised nearly one year after the earlier fixation, without any allegation or finding of suppression, also fell outside the normal six-month limitation period. The commentary states that both the enhanced capacity determination and the consequential demand were unsustainable.

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Issues: (i) Whether the Commissioner could retrospectively enhance the annual capacity of production after having fixed it earlier on the same material, and (ii) whether the show cause notice demanding differential duty was barred by limitation.

Issue (i): Whether the Commissioner could retrospectively enhance the annual capacity of production after having fixed it earlier on the same material.

Analysis: The annual capacity had already been fixed after joint verification, and the relevant facts including the actual production for 1996-97 were before the Commissioner at that stage. In the absence of any suppression by the assessee, the later notice seeking enhancement amounted in substance to a review of the earlier order. Such retrospective re-determination was not open to the Commissioner on the facts of the case.

Conclusion: The retrospective enhancement of annual capacity was not sustainable and was against the assessee.

Issue (ii): Whether the show cause notice demanding differential duty was barred by limitation.

Analysis: The notice was issued nearly one year after the earlier determination and sought duty for earlier periods. No suppression was alleged in the notice, and no finding of suppression was recorded in the impugned order. The demand therefore fell outside the normal six-month period under the governing limitation provision.

Conclusion: The show cause notice and the consequential duty demand were time-barred and were against the Revenue.

Final Conclusion: The demand and enhancement of capacity could not be sustained, and the assessee succeeded in the appeal.

Ratio Decidendi: In the absence of suppression, a final determination of annual capacity cannot be retrospectively reopened, and a duty demand raised beyond the normal limitation period is barred.

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