Extended limitation for suppression fails when credit disclosures are reflected in returns and demand becomes time-barred.

The extended period of limitation was not available where the assessee had filed returns disclosing availment and use of credit during the relevant period, and an earlier view treating structural items such as channels and similar items as eligible capital goods credit had remained undisturbed by the High Court. On those facts, suppression of material facts with intent to evade duty was not established, so the demand and consequential penalty were treated as time-barred and set aside.

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Issues: Whether the demand and penalty were barred by limitation on the ground of suppression of material facts with intent to evade duty.

Analysis: The show cause notice was issued for the earlier period by invoking the extended period of limitation. The records showed that the assessee had been filing returns disclosing the availment and use of credit during the relevant period. The assessee's own case had also earlier held structural items such as channels and similar items eligible for credit as capital goods, and that view had been left undisturbed by the High Court. In these circumstances, the allegation of suppression with intent to evade duty was not accepted.

Conclusion: The demand and consequential penalty were held to be time-barred and were set aside in favour of the assessee.

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