Extended limitation in excise cannot be invoked when job-work facts are fully disclosed to the Department.
A central excise demand against a job worker was held time-barred because the job-work arrangement had been disclosed to the Department through intimations, undertakings, classification lists, and pre-authenticated challans under Rule 57F(2) and Notification No. 214/86-CE. In the absence of any material showing suppression of facts, fraud, or wilful misstatement, the extended period under the proviso to Section 11A(1) could not be invoked. As the show cause notice was issued beyond the normal limitation period, the demand could not survive and the Revenue's challenge failed.
Issues: Whether the demand of central excise duty raised against the job worker was barred by limitation and whether the extended period under the proviso to Section 11A(1) could be invoked in the absence of suppression of facts.
Analysis: The goods were received and returned under Annexure-II challans in the framework of Rule 57F(2) and Notification No. 214/86-CE. The suppliers had filed intimations and undertakings before the jurisdictional authorities, the classification lists disclosed the job-work arrangement, and the challans were pre-authenticated by the Department. On these facts, the entire arrangement was within the knowledge of the excise authorities and there was no material to show suppression, fraud, or wilful misstatement by the assessee. Since the show cause notice was issued beyond the normal period, the extended limitation could not be sustained.
Conclusion: The demand was time-barred, the extended period was not invocable, and the Revenue's challenge failed.
Final Conclusion: The order dropping the duty demand was sustained and the Revenue's appeal stood rejected.
Ratio Decidendi: Where the relevant facts are disclosed to the Department and the job-work arrangement is carried out under the prescribed excise procedure, the extended period of limitation cannot be invoked in the absence of suppression or wilful misstatement.
TaxTMI 
AI Drafter ✕
TaxTMI 
