Extended limitation not available where job work clearances disclosed the arrangement and no suppression or wilful misstatement was established.

Job work clearances under Notification No. 214/1986-C.E. were held insufficient to sustain the extended limitation period where the principal manufacturer's declaration remained on record and was not withdrawn. On those facts, the job worker could reasonably proceed on the basis that the raw material was meant for use in manufacturing dutiable final products, so suppression or wilful misstatement with intent to evade duty was not made out. The demand raised after about four to five years was therefore barred by limitation and was set aside, with the duty demand and penalty annulled.

---

---

Issues: Whether the demand for central excise duty was barred by limitation on account of absence of suppression or misstatement with intent to evade duty, where the appellant had continued job work clearances under Notification No. 214/1986-C.E. on challans issued by the principal manufacturer.

Analysis: The appellant was carrying out job work for the principal manufacturer under challans issued in terms of Notification No. 214/1986-C.E., and the principal's declaration before the jurisdictional central excise authorities had not been withdrawn. Even after tractors became exempt, the raw material continued to be sent under the same job work procedure. In these circumstances, the appellant could reasonably proceed on the basis that the goods were intended for use in the manufacture of dutiable final products. The facts did not justify an allegation of suppression or wilful misstatement against the job worker, and the longer limitation period could not be invoked.

Conclusion: The demand raised after about four to five years was barred by limitation and was set aside.

Final Conclusion: The appeal succeeded and the duty demand and penalty were annulled with consequential relief.

---