Penalty and confiscation cannot survive once the main duty demand is set aside as time-barred.

Penalty under Rule 209A and confiscation of goods could not be sustained once the substantive duty demand against the main appellant had been set aside as time-barred. The ancillary proceedings were treated as dependent on the same demand, so when limitation extinguished the principal liability, the related penalty and confiscation also fell. The penalty order and confiscation were set aside, with consequential relief granted.

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Issues: Whether the penalty imposed under Rule 209A and the confiscation of goods could survive when the demand against the main appellant had already been set aside as time-barred.

Analysis: The demand against the main appellant firm had been quashed on limitation, and the same consequence necessarily affected the ancillary proceedings against the present appellants. Once the substantive duty demand no longer survived, the penalty and confiscation imposed in relation to the same matter could not be sustained.

Conclusion: The penalty under Rule 209A and the confiscation order were set aside, and the appeal was allowed with consequential relief.

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