Extended limitation and suppression of facts: withholding valuation data can defeat a revenue-neutrality defence in duty assessment.

Extended limitation may be invoked where an assessee suppresses material facts and withholds valuation data needed for assessment. In this CESTAT commentary, the assessee did not timely disclose the true nature of transfers of repacked and relabelled goods to a sister unit, and repeated requests for a Cost Accountant's certificate and related valuation information were not met. Misleading intimation on sale, unsupported by invoices, did not displace the transfer character of the transactions. The plea of revenue neutrality was treated as insufficient because it did not cure nondisclosure or establish bona fides. The demand and consequential liability were therefore sustained on limitation grounds.

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Issues: Whether the extended period of limitation was rightly invoked in the light of alleged suppression of material facts and the plea of revenue neutrality.

Analysis: The demand covered a multi-year period, and the assessee had not disclosed the true position regarding transfer of repacked and relabelled goods to its sister unit in a timely and complete manner. The record showed that the department repeatedly sought a Cost Accountant's certificate and other valuation data necessary to determine the assessable value, but the assessee failed to furnish the required material. The correspondence also indicated that the assessee's intimation was misleading on the question of sale, while the invoices did not establish actual sale and could not displace the fact of transfer of goods. The plea of revenue neutrality was held insufficient, because the assessee's conduct did not demonstrate full disclosure or bona fides, and withholding of relevant valuation information prevented the department from correctly ascertaining duty liability.

Conclusion: The extended period of limitation was validly invoked and the plea of revenue neutrality was rejected.

Final Conclusion: The appeal failed on limitation, and the demand and consequential liability were sustained.

Ratio Decidendi: Where an assessee suppresses material facts and withholds valuation data necessary for assessment, the extended period of limitation may be invoked, and revenue neutrality by itself does not negate suppression or establish bona fides.

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