Extended limitation for Modvat credit demands requires proof of fraud or suppression; incomplete revenue proof defeats recovery.

Rule 57-I allows recovery of Modvat credit within six months in the normal course, and within five years only where the Revenue proves fraud, wilful misstatement, collusion, suppression of facts, or contravention with intent to evade duty. The burden to establish these ingredients lies on the Revenue. On the facts, there was no material showing fraud or suppression by the assessee, and the invoices from registered dealers contained the relevant particulars. Extended limitation was therefore not invocable, and the demand was not justified.

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Issues: Whether the extended period of limitation could be invoked to deny Modvat credit when the Revenue failed to establish fraud, wilful misstatement or suppression of facts by the assessee.

Analysis: Rule 57-I permits recovery within six months in the normal case, and within five years only where credit has been taken by reason of fraud, wilful misstatement, collusion or suppression of facts, or contravention with intent to evade duty. The burden to establish the ingredients for the extended period lies on the Revenue. On the record, no material showed fraud, suppression or collusion by the assessee. The invoices received from registered dealers contained the relevant particulars, and no further investigation by the assessee was required to verify duty payment once the documents were otherwise complete.

Conclusion: The extended period of limitation was not invocable, and the Revenue failed to justify the demand.

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