Extended limitation cannot be invoked for removal of used capital goods when records disclose the transaction and no suppression is shown.

Removal of used capital goods does not justify invocation of the extended period where the credit and removal particulars are reflected in invoices and records. On those facts, disclosure in statutory records and departmental awareness negate suppression or misstatement with intent to evade duty, so limitation bars the demand, interest and penalty. The stated legal principle is that the extended period cannot be applied when the relevant facts concerning availment and removal of capital goods are fully recorded and no evasive intent is shown.

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Issues: Whether the demand, interest and penalty arising from removal of used capital goods was barred by limitation and whether invocation of the extended period was justified.

Analysis: The capital goods had been procured long before their removal, and the details of credit and removal were reflected in the invoice and other records. On those facts, the removal of used capital goods could not be treated as a case of suppression or misstatement with intent to evade duty. Since the assessee had complied with the statutory requirement and the Department was aware of the relevant particulars, the extended period of limitation was not available.

Conclusion: The demand and penalty were held to be time-barred, and the appeal succeeded on limitation alone.

Ratio Decidendi: Where the facts relating to availment and removal of capital goods are disclosed in the records and there is no suppression or misstatement with intent to evade, the extended period of limitation cannot be invoked.

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