Limitation and suppression in excise demand: prior departmental knowledge and no wilful intent defeated the revenue claim.

Duty demand was held time-barred because the Department already knew the material facts on manufacture and use of the brand name through the assessee's correspondence and declarations. Mere non-disclosure was insufficient to establish suppression; the record required evidence of a wilful intent to evade duty, which was absent. On that basis, the allegation of suppression failed, and the Revenue could not sustain denial of the SSI exemption benefit.

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Issues: Whether the demand was barred by limitation on the ground that there was no suppression of facts by the assessee, and consequently whether the Revenue could succeed in denying the benefit of the SSI exemption notifications.

Analysis: The demand was held to be time-barred because the material facts relating to manufacture and the use of the brand name were already within the Department's knowledge through correspondence and declarations furnished by the assessee. Mere silence was insufficient to constitute suppression; something more was required, namely a wilful intention to evade duty. On the record, there was no evidence to support the allegation that the assessee had suppressed the use of another person's brand name from the Department.

Conclusion: The demand was rightly held to be time-barred and the assessee succeeded on limitation. The Revenue's challenge to the order of the Commissioner (Appeals) failed.

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