Limitation and suppression of facts: contemporaneous disclosure defeated a later duty demand based on alleged concealment.

A duty demand was held time-barred because the assessee had made a contemporaneous disclosure to the department about the fire incident, damage to inputs and partially processed inputs, and reversal of CENVAT credit on the damaged goods. That disclosure was sufficient to prompt inquiry, and the later show-cause notice issued nearly five years later could not rest on suppression of facts. The employee's police statement and the absence of an insurance claim did not outweigh the prior written intimation. The revenue's challenge therefore failed on limitation.

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Issues: Whether the duty demand was barred by limitation on the ground that there was no suppression of facts by the assessee.

Analysis: The assessee had informed the department by letter dated 09.04.2010 about the fire incident, the damage to inputs and partially processed inputs, and the reversal of CENVAT credit on the damaged goods. This disclosure was sufficient for the department to initiate inquiry if necessary. The revenue did not act on the communication and commenced proceedings only after audit objection. The subsequent show-cause notice issued after nearly five years could not be sustained on the allegation of suppression. The employee's police statement and the absence of an insurance claim were insufficient to displace the contemporaneous disclosure made to the department.

Conclusion: The finding that the demand was time-barred is upheld and the appeal by the revenue fails.

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