Contemporaneous disclosure defeats suppression allegations and bars invocation of the extended limitation period for exemption disputes.

Contemporaneous disclosure of manufacturing activity and exemption claims to the Department defeats an allegation of suppression of facts. On the stated facts, the assessee had informed the Department about branded and non-branded clearances and its reliance on the small scale exemption notification, so the Department was already on notice and could have sought further details earlier. As a result, the extended period of limitation could not be invoked for denying the exemption, and the demand raised beyond the normal period was time-barred.

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Issues: Whether the demand was barred by limitation on account of alleged suppression of facts, and whether the Revenue could invoke the extended period for denial of small scale exemption.

Analysis: The appellants had issued letters to the Department intimating their manufacturing activity, including branded and non-branded goods, and had also referred to availing the exemption under Notification No. 08/2003 dated 01.03.2003. On those facts, the allegation that the clearances were concealed in order to evade duty could not be sustained. The correspondence was sufficient to put the Department on notice, and the Department could have sought further details at the relevant time. In the circumstances, the finding of suppression was not supportable, and the extended period of limitation was not invocable.

Conclusion: The demand beyond the normal period was time-barred, and the Revenue's challenge failed.

Final Conclusion: The order setting aside the extended-period demand was affirmed, and the Revenue's appeal was rejected.

Ratio Decidendi: Where the assessee has made a contemporaneous disclosure of the relevant manufacturing activity and exemption claim to the Department, the extended period cannot be invoked on a bare allegation of suppression of facts.

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