Extended limitation applies when separate input accounts are not maintained and exempt clearances are not reliably disclosed.

Extended limitation was held invocable where the assessee did not maintain separate accounts for inputs used in dutiable and exempt clearances and failed to show reliable disclosure of exempt removals to the department. The tribunal treated earlier prima facie stay-stage observations as non-binding and found the cited precedents inapplicable on the facts, because the record showed no dependable disclosure and no separate input accounts. As a result, the demand was not confined to the normal period, and the limitation challenge failed.

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Issues: Whether the demand could be confined to the normal period of limitation and whether the extended period was invocable in the facts of the case.

Analysis: The reasoning turned on the assessee's failure to maintain separate accounts for inputs used in dutiable and exempt clearances, together with the absence of evidence that particulars of removal of exempt goods were disclosed to the department. The earlier prima facie observations made at the stay stage were distinguished as non-binding and not determinative of the final issue. The cited decisions were found inapplicable on the facts, since the present case involved non-maintenance of separate records and no reliable disclosure of exempt clearances.

Conclusion: The extended period of limitation was held applicable and the demand was not restricted to the normal period, against the assessee.

Final Conclusion: No interference was called for with the order below, and the challenge to limitation failed.

Ratio Decidendi: Where an assessee fails to maintain separate accounts for inputs used in dutiable and exempt clearances and there is no reliable disclosure of exempt removals to the department, the extended period of limitation is invocable.

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