Extended limitation cannot be invoked against a job worker when the principal manufacturer fails to file the required declaration.

A job worker clearing goods under Notification No. 214/86-C.E. could not be charged with suppression or misstatement merely because the principal manufacturer failed to file the required declaration. The delivery challan procedure followed for the job work supported a bona fide belief that the clearances were covered by the notification, and the notice issued beyond the normal period had no valid basis for invoking the extended period of limitation. The demand was therefore held time-barred and unsustainable on limitation.

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Issues: Whether the demand could be sustained by invoking the extended period of limitation against a job worker acting under Notification No. 214/86-C.E. when the principal manufacturer had not filed the required declaration.

Analysis: The appellant was admittedly undertaking job work for the principal manufacturer and was following the delivery challan procedure contemplated by Notification No. 214/86-C.E. The omission to file the declaration by the principal manufacturer could not be attributed to the job worker as suppression or misstatement on the part of the appellant. The documentary procedure followed by the principal manufacturer was sufficient to create a bona fide belief that the clearances were covered by the notification, and the notice was issued beyond the normal period without a valid basis for extending limitation.

Conclusion: The demand was time-barred and could not be sustained on limitation.

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