Limitation for excise demand turns on the ER-1 return date, not ARE-1 filing, where periodical returns govern computation.

For limitation under the Central Excise Act, 1944, the relevant date depends on the statutory definition in section 11A. In a case involving reversal of credit on opting for exemption and subsequent export clearances, the period of limitation for a demand based on non-payment or short payment of duty is computed from the date of filing the periodical return, and the date of duty payment applies only residually when those categories do not fit. On that basis, the later ER-1 return, not the earlier ARE-1 filing, governed limitation. The show cause notice was therefore within time, and Revenue succeeded.

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Issues: Whether the show cause notice was barred by limitation, and whether the relevant date for computing limitation was the date of filing of ARE-1 or the date of filing of the ER-1 return.

Analysis: The dispute arose from utilisation of credit that was required to be reversed on opting for exemption and thereafter used for export clearances. The limitation period had to be determined under the definition of "relevant date" in section 11A of the Central Excise Act, 1944. Where the case relates to non-payment or short payment of duty and a periodical return is filed, the date of filing of that return is the relevant date; the date of payment of duty applies only as a residuary category when the earlier situations do not apply. Since the ER-1 return was in fact filed later, the earlier filing of ARE-1 could not displace the statutory basis for limitation.

Conclusion: The relevant date was the date of filing of the ER-1 return, and the show cause notice was not time-barred. The appeal was allowed in favour of Revenue.

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