Suppression in stockyard reconciliation can justify extended limitation and penalty, while an unexamined interest demand may need rehearing.

Suppression of material stockyard excess information, where not disclosed to the jurisdictional excise authorities despite regular stockyard statements and use of the Board-prescribed reconciliation procedure, may justify invocation of the extended period of limitation and sustain penalty. The document also notes that an interest demand must be supported by a clear statutory basis and examined against the assessee's specific objection; where this is not done, the interest component may be remanded for fresh adjudication.

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Issues: (i) Whether the demand and penalty were sustainable by invoking the extended period of limitation on the allegation of suppression of facts. (ii) Whether the demand of interest required reconsideration.

Issue (i): Whether the demand and penalty were sustainable by invoking the extended period of limitation on the allegation of suppression of facts.

Analysis: The record showed that the assessee was receiving regular monthly stockyard statements reflecting excess quantities, but did not establish that such information had been disclosed to the jurisdictional excise authorities. The assessee had also availed the special procedure under the Board's circular for reconciliation of excess and shortages in stockyards, which carried specific conditions, including payment of duty on net excess as prescribed. In these circumstances, the allegation of suppression was accepted for the purpose of limitation.

Conclusion: The invocation of the extended period of limitation was upheld and the penalty was sustained, against the assessee.

Issue (ii): Whether the demand of interest required reconsideration.

Analysis: The adjudication order demanded interest without specifying the statutory provision, and the assessee's precise objection on the interest component had not been examined by the adjudicating authority. The interest issue therefore required fresh consideration after hearing the assessee.

Conclusion: The interest demand was remanded to the adjudicating authority for de novo decision, in favour of the assessee on this limited issue.

Final Conclusion: The challenge to limitation and penalty failed, while the interest component was sent back for reconsideration.

Ratio Decidendi: Where an assessee avails a special procedure for stockyard reconciliation but does not show disclosure of material excess-stock information to the jurisdictional authorities, suppression may justify invocation of the extended limitation period; an interest demand lacking proper statutory examination may be remanded for fresh adjudication.

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