Disclosure of CENVAT re-credit to the department defeated suppression and made the demand time-barred on limitation.

Disclosure of re-credit in the CENVAT account to the department defeated any allegation of suppression, because the assessee had already informed the revenue by letter that it had taken re-credit after its rebate or re-credit request remained unattended. As the show-cause notice was issued nearly three years later, the demand was held to be barred by limitation and unsustainable on limitation alone, without examination of the merits.

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Issues: Whether the demand raised by the show-cause notice was barred by limitation in view of the assessee's disclosure of the re-credit taken in the CENVAT account.

Analysis: The assessee had informed the department by letter that it had taken re-credit of the duty paid on export clearances after its request for rebate or re-credit remained unattended. The notice was issued almost three years later. On these facts, no suppression of facts could be attributed to the assessee, and the delay in issuance of the notice made the demand unsustainable on limitation.

Conclusion: The demand was held to be time-barred and the appeal was allowed on limitation without examination of the merits.

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