Extended limitation for Modvat credit reversal requires clear allegations of suppression or misrepresentation in the notice.

A show cause notice demanding reversal of Modvat credit was considered time-barred because it was issued more than one year after receipt of the goods and did not allege suppression, misrepresentation, or similar culpable conduct with sufficient clarity. The text states that the extended limitation period cannot be sustained merely by relying on departmental approval unless the notice itself sets out the factual foundation of the charge. In the absence of such averments, the demand could not survive on limitation, and the matter was not examined on merits.

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Issues: Whether the show cause notice demanding reversal of modvat credit was barred by limitation in the absence of any allegation of suppression or misrepresentation.

Analysis: The notice was issued more than one year after receipt of the goods. Though the department sought to rely on the approval of the Commissioner to infer invocation of the extended period, the notice itself did not set out any allegation of suppression or misrepresentation. The extended period cannot be sustained unless the notice clearly states the factual foundation enabling the noticee to meet the charge. In the absence of such averments, the demand could not survive on limitation.

Conclusion: The show cause notice was time-barred and the appeal was allowed without entering into the merits.

Ratio Decidendi: The extended period of limitation cannot be invoked unless the show cause notice itself alleges suppression, misrepresentation, or similar culpable conduct with sufficient clarity.

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