Extended limitation for credit demand failed where records showed no suppression or wilful intent to evade duty.

Credit taken under the departmental challan procedure was reflected in the records and corresponded to amounts already debited on clearance of inputs for job work. On those facts, there was no material to show suppression, misdeclaration, or wilful intent to evade duty, so the extended limitation period could not be invoked. A mere contention that refund should have been claimed instead of taking credit suo motu was insufficient to sustain limitation-based demand. The demand was held time-barred and the Revenue's challenge failed.

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Issues: Whether the demand for reversal of credit was barred by limitation and whether the extended period could be invoked on the facts found.

Analysis: The credit had been taken on the basis of the departmental challan procedure and the relevant entries were reflected in the records produced before the department. Since the credit was linked to amounts already debited at the time of clearance of inputs for job work, there was no material to show a deliberate attempt to evade duty. A mere objection that the assessee should have claimed refund instead of taking credit suo motu did not establish suppression of facts, misdeclaration, or wilful intent to evade duty, which are necessary to sustain invocation of the extended limitation period.

Conclusion: The demand was time-barred and the extended period was not invocable; the Revenue's challenge failed.

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