Limitation in central excise demand fails where suppression is not proved and departmental awareness of facts is shown.

The demand was held time-barred because the department could not establish suppression of facts to invoke the extended limitation period. The goods had been cleared for exhibition without duty, later re-imported and removed after credit was taken, and the department's contemporaneous correspondence showed awareness of the transaction. The assessed value was only marginally higher than the declared export value, and the demand had been confirmed under Section 11A(1) of the Central Excise Act, 1944 rather than under the proviso for extended limitation, with suppression discussed only in the penalty context. The demand was therefore barred by limitation and the appeal succeeded.

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Issues: Whether the demand was barred by limitation and the extended period could be invoked in the absence of suppression of facts.

Analysis: The goods had originally been cleared for exhibition without payment of duty and were later re-imported and removed after credit was taken. The department had contemporaneous correspondence with the appellant regarding the transaction, showing awareness of the relevant facts. The assessed value adopted by the department was only marginally higher than the declared export value. The demand was also confirmed under Section 11A(1) of the Central Excise Act, 1944, and not under the proviso dealing with extended limitation, while suppression was discussed only for penalty. On these facts, suppression of facts was not established for invoking the extended period.

Conclusion: The demand was barred by limitation and the appeal succeeded.

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