Deemed credit on market purchases cannot be denied absent duty documents where records are maintained and no suppression is shown.

Deemed credit on re-rollable iron or steel materials purchased from the market could not be denied merely because the sellers' full addresses and duty-paying documents were not produced, where the governing circular allowed credit on such purchases without documentary proof of duty payment and the assessee maintained purchase records, stores receipt entries and RG 23 accounts. The Revenue also failed to allege fabrication of documents, so the denial of credit was unsustainable. The longer limitation period could not be invoked because the relevant period showed no material of suppression, misstatement or similar conduct, and departmental audit had not detected any irregularity. The assessee therefore succeeded with consequential relief.

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Issues: (i) whether deemed credit on re-rollable materials purchased in the market could be denied for want of the sellers' full address and for absence of production of duty-paying documents; (ii) whether invocation of the longer period of limitation was justified in the facts of the case.

Issue (i): Whether deemed credit on re-rollable materials purchased in the market could be denied for want of the sellers' full address and for absence of production of duty-paying documents.

Analysis: The governing circular provided that ingots and re-rollable materials of iron or steel purchased outside on or after 1-4-1987 may be deemed to have suffered duty and credit may be allowed without production of documents evidencing payment of duty. On that basis, detailed verification of market purchases was not contemplated. The existence of meticulous purchase records, stores receipt entries and RG 23 accounts further supported the claim, and the Revenue did not allege fabrication of documents.

Conclusion: The denial of deemed credit was not sustainable and was in favour of the assessee.

Issue (ii): Whether invocation of the longer period of limitation was justified in the facts of the case.

Analysis: The disputed period fell within December 1987 to February 1988. Departmental audit had not pointed out any irregularity, and there was no material to show suppression, misstatement or other circumstances warranting extended limitation. In the absence of any adverse finding in audit and in view of the record maintained by the assessee, the longer period could not be invoked.

Conclusion: Invocation of the extended period of limitation was not justified and was in favour of the assessee.

Final Conclusion: The order denying deemed credit could not be sustained, and the assessee succeeded with consequential relief.

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