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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the demand of differential central excise duty was barred by limitation on the ground that there was no suppression of material facts or wilful misstatement by the assessee.
Analysis: The assessee had filed classification lists, price lists and RT-12 returns from time to time, all of which were approved by the department. The manufacturing process had also been disclosed to the department and inspected on more than one occasion. On the facts found, the department was aware that hydrochloric acid was being accounted for on a 100% basis and that the actual process involved manufacture of hydrochloric acid of 30% to 33% concentration. In these circumstances, the failure to expressly clarify the basis of valuation at the time of approval could not be attributed to suppression by the assessee. The later change of view by the department did not establish any deliberate concealment with intent to evade duty.
Conclusion: The allegation of suppression was not established and the extended period of limitation could not be invoked. The demand for the relevant period was time-barred, and the Revenue's appeal was rejected.
Ratio Decidendi: Where the assessee has disclosed the manufacturing process and filed returns and lists that were approved by the department, and the department had knowledge of the relevant facts, the extended limitation period cannot be invoked in the absence of proven suppression or wilful misstatement.
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