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Issues: Whether the extended period of limitation under the proviso to section 11A of the Central Excise Act, 1944 could be invoked on the ground of suppression of facts and wilful contravention while demanding reversal of Modvat credit on the capital goods in question.
Analysis: The assessee had disclosed the invoices and monthly returns, and the department had defaced the invoices with an endorsement indicating awareness of the credit availed. There was no statutory requirement to disclose the exact usage of the capital goods, and non-disclosure of information not required by law could not amount to suppression. The Tribunal did not deal with the Commissioner (Appeals)'s findings that there was no suppression and no material to show wilful intent to evade duty. In these circumstances, the ingredients necessary for invoking the extended period were absent, and the demand was time-barred.
Conclusion: The issue was answered in favour of the assessee and against the Revenue. The extended period of limitation was not available, and the demand notices were barred by limitation.
Ratio Decidendi: Suppression of facts for the purpose of the proviso to section 11A requires a wilful, duty-evading omission or misstatement of material information that the assessee was legally bound to disclose; mere non-disclosure of information not required by law does not justify invocation of the extended limitation period.
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