Inter-unit valuation and limitation: no suppression without concealment, and assessable value cannot include overall company profit.

Extended limitation could not be invoked for alleged suppression in inter-unit clearances where goods were cleared on duty-paid invoices, transferred under disclosed sales norms, and valuation correspondence with excise authorities was on record; the demand on limitation therefore failed. Assessable value for transfers to sister units had to be based on comparable goods with suitable adjustment, or on cost with only item-specific normal profit, and not on the company's overall profit; the valuation adopted was unsustainable. As a result, the demand, penalties, and interest did not survive, and consequential relief followed.

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Issues: (i) Whether the extended period of limitation could be invoked on the ground of suppression of facts in relation to inter-unit clearances; (ii) whether the assessable value for the goods transferred to sister units was correctly determined by adopting overall profit instead of comparable goods / normal profit basis.

Issue (i): Whether the extended period of limitation could be invoked on the ground of suppression of facts in relation to inter-unit clearances.

Analysis: The goods were cleared under invoices after payment of duty and the valuation was made under the assessee's sales norms for inter-unit transfers. Those norms indicated that inter-unit prices were not meant to be below market price and could even exceed it by a margin. The record also showed correspondence with the excise authorities on valuation. On these facts, there was no basis to infer concealment, suppression of facts, or any colourable device to evade duty.

Conclusion: The invocation of the extended period was not sustainable and the assessee succeeded on limitation.

Issue (ii): Whether the assessable value for the goods transferred to sister units was correctly determined by adopting overall profit instead of comparable goods / normal profit basis.

Analysis: For comparable goods, valuation was required to be based on the price of comparable goods with suitable adjustment. Where cost-based valuation was needed, only normal profit relatable to the item under assessment could be added to cost of production. The assessee's inter-unit transfers were comparable with sales to unrelated buyers, and there was no warrant for loading the assessable value with the overall profit of the entire company. The valuation adopted in the impugned order was therefore erroneous on merits as well.

Conclusion: The assessable value was not correctly determined; the valuation adopted by the Revenue was unsustainable.

Final Conclusion: The demand, penalties, and interest did not survive, and the appeal was allowed with consequential relief.

Ratio Decidendi: In inter-unit valuation disputes, the extended period cannot be invoked absent suppression of facts, and assessable value must be fixed on the basis of comparable goods or item-specific cost with normal profit, not by adding the assessee's overall profit.

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