Limitation and suppression of facts fail where the manufacturer disclosed the process and exemption claim was examined before grant.

The demand was barred by limitation because the department could not invoke the extended period on the basis of alleged suppression of facts. The appellant had filed a declaration and disclosed the manufacturing process, including the emergence of Red Oxide during production, and the department had examined the declaration and process chart before granting exemption under Notification No. 50/2003-CE. On those facts, the manufacture of Red Oxide could not be treated as suppressed, so the show cause notice founded on suppression was not sustainable.

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Issues: Whether the demand was barred by limitation and the extended period could be invoked on the ground of suppression of facts in relation to availment of exemption under Notification No. 50/2003-CE dated 10.06.2003.

Analysis: The appellant had filed a declaration and disclosed the manufacturing process, including the emergence of Red Oxide during production. The declaration and process chart were examined by the department, and exemption was granted. In these circumstances, the facts relating to manufacture of Red Oxide could not be treated as suppressed. Consequently, invocation of the extended period and the consequent show cause notice were not sustainable.

Conclusion: The demand was held to be barred by limitation and the finding of suppression of facts was rejected.

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