Extended limitation for suppression fails where disclosure was made by the assessee, while admitted duty liability can still sustain the demand.

An unchallenged finding that the assessee itself disclosed non-payment after crossing the exemption limit prevented invocation of the extended period of limitation for suppression of facts. The duty demand was nevertheless sustained because the assessee had acknowledged its liability and expressed willingness to pay before the original authority, making the demand enforceable on the facts recorded. Penalty did not survive in the same form after the demand was restored and the earlier setting aside of the order on that aspect was not maintained.

---

---

Issues: (i) Whether the extended period of limitation could be invoked on the ground of suppression of facts; (ii) whether the duty demand survived in view of the assessee's acknowledgment of liability and whether penalty was sustainable.

Issue (i): Whether the extended period of limitation could be invoked on the ground of suppression of facts.

Analysis: The finding that the assessee's non-payment of duty after crossing the exemption limit was disclosed by the assessee themselves and was not independently detected by the department had already been recorded and remained unchallenged by the Revenue. Once that finding of no suppression stood concluded, the foundation for invoking the extended period solely on the allegation of suppression was unavailable. The bar of challenge to that finding also operated against the Revenue.

Conclusion: The extended period of limitation was not invocable against the assessee.

Issue (ii): Whether the duty demand survived in view of the assessee's acknowledgment of liability and whether penalty was sustainable.

Analysis: The assessee had expressed willingness to pay the duty even before the original authority, and that acknowledgment of liability was recorded in the adjudication order. On that basis, the duty demand was treated as enforceable notwithstanding the limitation objection that had failed on the facts recorded. As the demand itself was upheld, the penalty could not stand in the same manner as imposed when the Commissioner (Appeals) had set aside the entire order.

Conclusion: The duty demand was confirmed, while the penalty did not survive.

Final Conclusion: The appeal succeeded only to the extent of restoring the excise duty demand, and the relief against penalty remained undisturbed.

Ratio Decidendi: An unchallenged finding that suppression of facts is absent precludes invocation of the extended period of limitation, and an admitted acknowledgment of duty liability can sustain the duty demand even where such extended limitation is unavailable.

---