Demand :

The word “demand” as per Black‘s Law Dictionary means assertion of a legal right; an imperative request preferred by one person to another, under a claim of right, requiring the latter to do or yield something or to abstain from some act. Demand under any taxation laws arises as tax payer understands/ interprets the provision to his benefit and on the other hand revenue interprets the law to its benefit. It could happen when the assessee short pays the duty or doesn‘t pay the duty or avails the benefit of notification without satisfying the conditions, avails credit irregularly, misclassifies the products, or undervalues the goods. However, when the valid demands are made due to non payment or short payment, the effect of the same can be quite serious especially as the same is not normally recoverable from the customer. The cost of interest, penalty and legal expenses can also be substantial.