Extended limitation cannot apply when declarations and statutory records disclose captive use and no suppression is shown.

Where the assessee disclosed the relevant facts in declarations and statutory records, and the department already knew that HR Sheets were captively used in manufacturing Steel Formers, the extended period of limitation could not be invoked. In the absence of deliberate suppression or wilful misstatement intended to evade duty, the longer limitation period was unavailable, and the demand was held time-barred.

---

---

Issues: Whether the demand could be sustained by invoking the extended period of limitation in view of the declarations filed, entries made in the statutory records, and the department's prior knowledge of the captive use of inputs in the manufacture of Steel Formers.

Analysis: The appellants had filed relevant declarations and reflected the use of HR Sheets in the statutory RG 23C register. The facts regarding captive utilisation of the inputs for manufacture of Steel Formers were thus already within the knowledge of the department. In these circumstances, there was no basis to allege deliberate suppression or wilful misstatement so as to justify invocation of the longer limitation period. The demand was therefore hit by limitation and could not be confirmed.

Conclusion: The extended period of limitation was not invokable and the demand was time-barred; the decision was in favour of the assessee.

Ratio Decidendi: Where the relevant facts are disclosed in declarations and statutory records and are known to the department, the extended period of limitation cannot be invoked in the absence of deliberate suppression or intent to evade duty.

---