Extended limitation in excise upheld where assessee failed to disclose actual use of inputs and material facts

Non-disclosure of the actual use of inputs and failure to file the relevant classification list justified invocation of the extended period of limitation, because the Revenue was not put on notice of the material facts despite permission for controlled movement of aluminium ingots under the excise rules. The Tribunal's finding that the goods were marketable was treated as a factual determination and no infirmity was shown in that finding. The Tribunal's acceptance of marketability and extended limitation was upheld, and the challenge to the demand failed.

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Issues: (i) Whether the goods in question were marketable; (ii) Whether invocation of the longer period of limitation was justified.

Issue (i): Whether the goods in question were marketable.

Analysis: The finding of the Tribunal on marketability was treated as a finding of fact. No infirmity was found in that determination, and no basis for interference was made out.

Conclusion: The finding on marketability was upheld, against the assessee.

Issue (ii): Whether invocation of the longer period of limitation was justified.

Analysis: The assessee had not filed the relevant classification list and had not maintained proper accounts of manufacture. The permission granted for despatch of aluminium ingots under Rule 57F(2) was not sufficient to show that the Revenue knew that the aluminium wire rods would be used to manufacture aluminium wires cleared without payment of duty. On those facts, the Tribunal's conclusion that the extended period was invocable was accepted.

Conclusion: Invocation of the longer period of limitation was upheld, against the assessee.

Final Conclusion: The Tribunal's order was sustained in full, and the challenge to the demand was rejected.

Ratio Decidendi: Where the assessee fails to disclose the actual use of inputs and the relevant facts are not brought to the notice of the Revenue, the extended period of limitation may be invoked even if some permission exists for controlled movement of goods under the excise rules.

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