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Issues involved:
The appeal against the confirmed demand and penalty u/s customs duty on illegal import of polyester yarn and polyester cotton yarn from Nepal without discharging customs duty. Summary: The appellant appealed against the confirmed demand of &8377; 12,78,627/- and penalty of &8377; 5 lakhs for illegal import of polyester yarn and polyester cotton yarn from Nepal without paying customs duty. The investigation started in 1994, with statements recorded in 1995, and a show cause notice issued in 2003. The adjudicating authority found the demand of &8377; 98.38 lakhs not sustainable, leading to the confirmed demand of &8377; 12,78,627/- and penalty. The appellant argued that the show cause notice was time-barred and the confirmed demand was illegal. The department supported the impugned order. Upon review, it was found that the demand proposed in the show cause notice was not sustainable at &8377; 98,38,238/-. Therefore, any amount paid by the appellant during investigation should be refunded entirely as the proposed demand was not upheld. Consequently, no penalty is leviable on the appellant. The impugned order confirming the demand and penalty was set aside, and the appeal was allowed with consequential relief.
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