Extended limitation cannot apply without suppression when clearances and exemption claims were fully disclosed under central excise records.

Extended limitation under central excise cannot be invoked absent suppression or mis-declaration where the assessee fully disclosed the relevant clearances and tax treatment. The invoices, PLA, RT-12 returns and classification list showed that the assessee had consistently reflected molasses-based clearances, paid 8% of the price on the exempted denatured ethyl alcohol under Rule 57CC, and claimed exemption under Notification No. 67/95-CE before its amendment. On those disclosed facts, there was no concealment of material particulars, so the demand issued for the earlier period was time-barred. The demand on molasses used captively in manufacture of ethyl alcohol was therefore barred by limitation.

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Issues: Whether the demand of duty on molasses used in the manufacture of denatured ethyl alcohol was sustainable by invoking the extended period of limitation on the ground of suppression or mis-declaration, where the assessee had disclosed the goods, cleared the exempted product on payment of 8% of its price under Rule 57CC of the erstwhile Central Excise Rules, 1944, and claimed exemption under Notification No. 67/95-CE dated 16.3.95 prior to its amendment by Notification No. 31/2001-C.E. dated 1.6.2001.

Analysis: The relevant invoices, PLA and RT-12 returns showed that the assessee had consistently reflected the clearances and had paid 8% of the price of the exempted denatured ethyl alcohol. The classification list also disclosed that ethyl alcohol was an exempted product. On these facts, there was no concealment or misstatement of material facts so as to justify the longer limitation period. Since the demand was issued in 2000 for the period December 1996 to June 1999, the notice was time-barred.

Conclusion: The invocation of the extended period was not sustainable, and the demand on molasses used captively for manufacture of ethyl alcohol was barred by limitation in favour of the assessee.

Ratio Decidendi: Where the assessee has made full disclosure of the relevant facts and the department has accepted the disclosed method of clearance, the extended period of limitation cannot be invoked in the absence of suppression or mis-declaration.

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