Extended limitation and penalty in central excise upheld where clearance details were withheld and suppression was established.

Departmental knowledge does not by itself defeat the extended limitation period under section 11A where the assessee withholds material clearance details and the relevant data is obtained only through search and investigation. On those facts, the demand was treated as within time. Penalty under section 11AC and Rule 173Q was also upheld because the non-disclosure of clearance particulars supported a finding of suppression and intent to evade duty. The objection that the demand was inflated by not adopting cum-duty valuation failed because the show-cause notice already proceeded on a cum-duty basis. The belated claim for modvat credit was rejected as it had not been raised earlier and could not be verified after a long lapse of time.

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Issues: (i) Whether the demand was barred by limitation and the extended period could be invoked on the facts disclosed; (ii) Whether penalty was sustainable for suppression and intent to evade duty; (iii) Whether the demand was inflated by not treating the sale price as cum-duty price and whether modvat credit could be allowed at the appellate stage.

Issue (i): Whether the demand was barred by limitation and the extended period could be invoked on the facts disclosed.

Analysis: The relevant date for limitation under section 11A is governed by the statutory scheme, and departmental knowledge by itself does not displace the proviso where non-payment and non-disclosure of the relevant data continue. The facts showed that although the assessee informed the department of duty liability, the clearance particulars for the earlier period were not furnished and the necessary data had to be obtained only after search and investigation. In these circumstances, the demand issued within the prescribed extended period could not be treated as time-barred.

Conclusion: The demand was not barred by limitation and the extended period was validly invoked.

Issue (ii): Whether penalty was sustainable for suppression and intent to evade duty.

Analysis: Penalty under section 11AC and Rule 173Q depends on conduct showing suppression or wilful non-disclosure with intent to evade duty. The failure to provide clearance details after the initial communication, coupled with the need for search and seizure to obtain the relevant figures, established suppression for the relevant period. The record therefore supported imposition of penalty.

Conclusion: Penalty was rightly imposed and no interference was warranted.

Issue (iii): Whether the demand was inflated by not treating the sale price as cum-duty price and whether modvat credit could be allowed at the appellate stage.

Analysis: The show-cause notice itself proceeded on the basis of cum-duty valuation, so the grievance of inflated demand was factually unsupported. The plea for modvat credit was also unavailable because it had not been raised before the lower authorities or supported by evidence, and verification after a long lapse of time was impracticable.

Conclusion: The challenge to the computation of demand and the claim for modvat credit were rejected.

Final Conclusion: The order of the Commissioner (Appeals) was sustained in full, with the demand, interest and penalty maintained.

Ratio Decidendi: For limitation under section 11A of the Central Excise Act, departmental knowledge does not by itself defeat the extended period where suppression of material clearance details and intent to evade duty are established, and penalty is sustainable on the same factual foundation.

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