Limitation on MODVAT credit denial applies where returns and duty documents were duly disclosed without suppression.

MODVAT credit denial was held time-barred because the extended period under Rule 57I could not be invoked without suppression, wilful misstatement, or intent to evade duty. The assessee had filed monthly returns regularly, supported by the relevant duty-paying documents, and the documents were duly defaced by the proper officer. As the relevant particulars had been disclosed and no concealment was established, the demand for denial of credit could not be sustained.

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Issues: Whether the demand for denial of MODVAT credit was barred by limitation in the absence of suppression, wilful misstatement, or intent to evade duty.

Analysis: The credit was taken during July 1994 to September 1995 and the show cause notice was issued on 25.10.1996. The record showed that monthly returns were filed regularly along with the relevant duty-paying documents, and the documents were duly defaced by the proper officer. On these facts, the ingredients required for invoking the extended period under Rule 57I were not established. Since there was no dispute regarding disclosure of the relevant particulars, the demand could not be sustained on the basis of suppression with intent to evade payment of duty.

Conclusion: The demand was time-barred and the denial of credit could not be sustained.

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