Extended limitation and manufacturer liability in excise fail where suppression is unproven and job-work manufacture is not established.

Extended excise limitation cannot be invoked unless the Department establishes suppression of facts or wilful misstatement with intent to evade duty; on the stated record, prior disclosure, departmental visits, and filed returns negatived those ingredients, so the demand for the earlier period was time-barred. Separate excise liability could not be fastened on the respondent as manufacturer of job-work goods without cogent proof that it itself carried out manufacture or that a distinct product emerged from its own activity; mere storage, testing, packing, or clearance did not suffice. The proceedings were therefore dropped and the adjudication was left undisturbed.

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Issues: (i) whether the demand was barred by limitation in the absence of suppression of facts or wilful misstatement, and (ii) whether the respondent could be treated as the manufacturer of the goods cleared on job-work basis.

Issue (i): whether the demand was barred by limitation in the absence of suppression of facts or wilful misstatement.

Analysis: The Department had been informed of the respondent's trading activities well before the search and seizure, and the record showed that officers had visited the premises and that returns and declarations had been filed and checked without objection for the relevant period. On those facts, there was no basis to infer suppression of material facts or wilful misstatement with intent to evade duty. In the absence of the ingredients required for the extended period, the demand for the earlier period could not be sustained under the extended limitation provision.

Conclusion: The demand was barred by limitation and the extended period could not be invoked.

Issue (ii): whether the respondent could be treated as the manufacturer of the goods cleared on job-work basis.

Analysis: The record showed that the goods were manufactured by job workers and that the Department had not produced cogent evidence to establish that the respondent itself undertook manufacture or that a new and distinct product emerged from the respondent's own activity. In such circumstances, the burden remained on the Department to prove manufacture, and mere storage, testing, packing, or clearance from the respondent's premises did not by itself establish manufacturing liability. The relationship and the job-work arrangement did not justify treating the respondent as the manufacturer within the meaning of the excise law.

Conclusion: The respondent could not be treated as the manufacturer of the said goods.

Final Conclusion: The appeal failed on both limitation and manufacture, and the adjudication dropping the proceedings was left undisturbed.

Ratio Decidendi: The extended period of excise limitation cannot be invoked without suppression or wilful misstatement, and the Department bears the burden of proving manufacture before fastening excise liability on the assessee.

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