Limitation and suppression in central excise: disclosed exemption claim prevented use of the extended period.

An assessee that disclosed its exemption claim before clearance by filing the prescribed declaration and enclosing the supporting certificate could not be said to have suppressed material facts. Because the department was already aware of the claim and could have acted within the normal limitation period, invocation of the extended period under the proviso to Section 11A(1) of the Central Excise Act was unjustified. The demand was therefore time-barred and the extended limitation was rejected.

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Issues: Whether the demand was barred by limitation and whether invocation of the proviso to Section 11A(1) of the Central Excise Act, 1944 was justified when the assessee had filed a declaration under Rule 173B of the Central Excise Rules, 1944 and furnished the certificate supporting exemption under Notification No. 64/95 dated 16.03.1995.

Analysis: The assessee had disclosed its claim for exemption before clearance of the goods by filing the declaration and enclosing the certificate issued by the Department of Space. On these admitted facts, the department was aware of the exemption claim and could have initiated proceedings within the normal period. Since the material facts were already disclosed, there was no suppression of facts and the extended limitation under the proviso to Section 11A(1) could not be invoked.

Conclusion: The demand was held to be time-barred and the invocation of the extended period was rejected.

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