2006 (8) TMI 179 - SUPREME COURT

Whether the Department could invoke the extended period of limitation under proviso to Section 28 of the Act?

Held that:- In the present case we find that in the show cause notice it is not alleged that duty of custom could not been levied or paid by reason of collusion or willful mis-statement or willful suppression of facts. The appellants were not put to notice which of the various omissions or commissions stated in the proviso were committed by them to extend the period of limitation from six months to five years. The appellants having not been put to notice did not have the opportunity to meet the case of the Department.

The Department would not be entitled to invoke the proviso to Section 28 of the Customs Act and avail of extended period of limitation. The appeals are partly accepted. The appellants would be liable to pay the duty for a period of six months prior to the date of issuance of the show cause notice and not for the subsequent period. The demand for the subsequent period is held to be beyond the period of limitation. Accordingly, the demand of duty and levy of penalty for the subsequent period is quashed. Penalty, if any, for the period of six months immediately preceding the issuance of notice, for which the assessee has agreed to pay the duty, is also waived.