Extended limitation cannot apply to disclosed job-work clearances absent suppression or wilful concealment.

The extended period of limitation under the Central Excise Act could not be invoked for job-work clearances where the assessee had disclosed the material facts and the Department had access to the relevant applications, declarations, challans, returns and job-work records. As the movement of goods followed the prescribed Rule 57F(4) procedure and suppression or wilful concealment was not established, the demand was time-barred. The penalties also failed once the demand itself was held unsustainable.

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Issues: Whether the extended period of limitation under the Central Excise Act could be invoked for demanding duty and imposing penalties in respect of job-work clearances when the material facts were disclosed to the Department and the relevant movement of goods was carried out under the prescribed procedure.

Analysis: The dispute concerned castings manufactured on job-work basis and sent under the procedure prescribed by Rule 57F(4) of the Central Excise Rules, 1944. The record showed that the principal manufacturer had filed the relevant applications and declarations, challans were used for movement of inputs and semi-finished goods, and the Department had access to the classification lists, returns, job-work records and other documents. The castings were intended for use in power driven pumps, and the adjudicatory record itself reflected that the relevant facts were known to the Department. On these facts, the element of suppression or wilful concealment required to sustain the extended limitation period was not made out. Since the demand itself was held to be time-barred, the penalties could not survive.

Conclusion: The extended period of limitation was not invokable and the demand and penalties were unsustainable.

Ratio Decidendi: Where the assessee has disclosed the material facts and the Department is aware of the job-work activity and related clearances, the extended period for demand cannot be invoked in the absence of suppression or wilful contravention.

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