Suppression and extended limitation in Modvat credit disputes fail when disputed items were disclosed in statutory records.

Where Modvat credit was availed on items disclosed in RT-12 returns and RG-23 records, suppression could not be inferred merely because the items were later found not to be inputs. The Tribunal held that the assessee's contemporaneous disclosures and the record of its own admissions showed no undisclosed conduct justifying the extended period of limitation. Reliance on export under bond and alleged revenue neutrality did not cure the incorrect availment, but those factors also did not establish suppression on the facts. The extended period was therefore not invocable, and the assessee succeeded on limitation.

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Issues: Whether the extended period of limitation could be invoked for denying Modvat credit on the ground of suppression, when the credit availed items were declared in statutory returns and the assessee relied on export under bond and revenue neutrality.

Analysis: The assessee had disclosed the goods in RT-12 returns and RG-23 records, and relied on the scheme permitting export of inputs as such under bond. The Tribunal nevertheless noted that the earlier order recorded an admission that certain items were not inputs, and that the declarations themselves treated them as inputs. The departmental reliance on the assessee's own admission and the contemporaneous record supported the view that the incorrect availment was not a case of undisclosed conduct. The Board circular on export of inputs as such under bond explained the credit mechanism for genuine inputs, but it did not erase the fact that the disputed credit had been taken on items which were later found not to be inputs. On the facts, the Tribunal held that the invocation of suppression could not be sustained merely by reference to the alleged revenue neutrality or export arrangement.

Conclusion: The extended period of limitation was not invocable, and the assessee succeeded on this issue.

Ratio Decidendi: Where the relevant facts were disclosed in statutory records and the dispute turned on whether the items were inputs, suppression of facts could not be inferred so as to justify invocation of the extended period.

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