Rule 8 inter-unit transfers: suppression was not made out, and the excise demand failed as time-barred.

In inter-unit clearances valued under Rule 8, the Tribunal held that extended limitation could not be invoked where the assessee regularly filed RT-12 returns and the department was aware of the transfers. On those facts, the allegation of suppression of facts was not sustainable, and the notice issued beyond the normal period was barred by limitation. The Tribunal also treated the matter as one of revenue neutrality in sister-unit transfers. The excise duty and interest demand was therefore held time-barred, and the assessee succeeded on limitation.

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Issues: Whether the demand of central excise duty and interest could be sustained when the clearances were made to sister units, valuation was governed by Rule 8, the returns were regularly filed, and the notice was issued beyond the normal period on the allegation of suppression of facts.

Analysis: The dispute concerned inter-unit transfers and the application of Rule 8 valuation. The Tribunal relied on coordinate and prior Tribunal decisions holding that where the department was aware of the clearances and the assessee had regularly filed RT-12 returns, the allegation of suppression was not sustainable. In such circumstances, issuance of the notice beyond the normal limitation period could not be justified. The Tribunal also treated the case as one involving revenue neutrality in inter-unit transfers.

Conclusion: The demand was held to be time-barred and the appeal was allowed in favour of the assessee on limitation.

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