Extended limitation for CENVAT credit disallowance fails absent suppression or intent to evade, especially when disclosed in returns.

Extended limitation under excise law cannot be invoked for disallowance of CENVAT credit unless there is positive evidence of suppression of facts, wilful misstatement, or intent to evade duty. Mere wrong availment of credit is insufficient, and where the credit is disclosed in periodical returns the department is on notice to examine admissibility. In the absence of such evidence of concealment, the extended period fails to apply and the demand becomes time-barred. The discussion therefore states that disclosure in regular returns ordinarily defeats invocation of the extended limitation period, with the credit dispute decided in favour of the assessee on limitation.

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Issues: Whether the extended period of limitation could be invoked for disallowance of CENVAT credit when the availment was disclosed in periodical returns and there was no evidence of suppression of facts with intent to evade duty.

Analysis: Invocation of the extended period requires material showing that the assessee knew the credit was not admissible and nevertheless suppressed facts with intent to evade duty. Mere wrong availment of credit, without such evidence, is insufficient. Where the credit availed is reflected in returns, the department is put on notice and can inquire into admissibility; in such a situation, absence of any positive evidence of suppression or wilful misstatement negatives the extended limitation period.

Conclusion: The extended period was not invokable and the demand was time-barred.

Final Conclusion: The credit dispute was decided in favour of the assessee on limitation, resulting in allowance of the appeal.

Ratio Decidendi: Extended limitation under excise law cannot be applied unless there is positive evidence of suppression of facts or intent to evade duty, and disclosure of credit in regular returns ordinarily defeats such invocation.

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