Revenue-neutral stock transfer disputes cannot support extended limitation or equal penalty absent suppression or intent to evade.

Revenue-neutral stock transfers to a sister unit did not justify invocation of the extended limitation period or equal penalty where the assessee had regularly filed returns and disclosed information to the department. Because the duty paid at one unit was available as Cenvat credit to the other, the demand lacked a basis for alleging suppression or intent to evade duty. In the absence of wilful suppression or fraudulent intent, the proviso to Section 11A could not be applied and penalty under Section 11AC was not sustainable. The appeal was allowed with consequential relief.

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Issues: Whether the extended period of limitation and equal penalty were sustainable in a revenue-neutral stock transfer case where the assessee had filed returns regularly and the duty paid at one unit was available as Cenvat credit to the sister unit.

Analysis: The assessee had regularly filed returns and furnished information to the department. The duty demand arose from stock transfers to a sister concern, and the duty paid by one unit would be available as credit to the other unit. In such circumstances, the matter was revenue neutral and there was no basis to infer suppression or intent to evade duty. The cited precedents supported the principle that, absent wilful suppression or intent to evade, the extended period under the proviso to Section 11A and penalty under Section 11AC could not be sustained.

Conclusion: The extended period of limitation was not invocable and the penalty was not sustainable; the issue was decided in favour of the assessee.

Final Conclusion: The appeal was allowed with consequential relief, as the demand could not be sustained on limitation and penalty grounds in the revenue-neutral factual setting.

Ratio Decidendi: Where the duty burden is revenue neutral and the assessee has not acted with wilful suppression or intent to evade, the extended limitation period and equal penalty cannot be invoked.

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