MODVAT credit and limitation: disclosed documents and no suppression meant the extended period could not be invoked.

MODVAT credit supported by duty-paid input documents was held not to involve suppression of facts where the documents were filed with RT-12 returns and defaced by the Range Superintendent. Because the relevant particulars were already disclosed and the duty-paid nature of the inputs was not disputed, the department could not later treat the documents as improper or invoke the extended limitation period on alleged suppression. As the demand was raised beyond the normal six-month period and no basis existed for extension, it was held time barred and the limitation issue was decided in favour of the assessee.

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Issues: Whether the demand was barred by limitation and the extended period could be invoked on the allegation of suppression of facts in relation to MODVAT credit availed on duty-paid input documents.

Analysis: The documents on which credit was taken were filed with the RT-12 returns and were defaced by the Range Superintendent. The documents themselves disclosed the nature of the transaction, and the duty paid on the inputs was not disputed. Once the department had approved the documents by defacement and the relevant particulars were already disclosed in the returns, it could not later contend that the documents were improper or that there had been suppression of facts. The demand had been raised beyond the normal period of six months and no basis existed for applying the extended limitation period.

Conclusion: The demand was held to be time barred and the limitation issue was decided in favour of the assessee.

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