Extended limitation and supplementary invoice credit fail without proved suppression or intent to evade duty.

In the absence of proved suppression or intent to evade duty, the extended period of limitation under Section 11A cannot be invoked for a differential duty demand, and the demand is time-barred. Where the supplier subsequently pays differential duty and issues supplementary invoices, Cenvat credit remains admissible to the buyer unless the additional duty arose from fraud, collusion, wilful misstatement, or suppression of facts. The note also records that credit on supplementary invoices was treated as allowable even before the later notification relied on by the parties. The stated ratio is that unproved suppression defeats extended limitation and does not, by itself, justify denial of credit.

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Issues: (i) Whether the extended period of limitation under Section 11A could be invoked for the differential duty demand; (ii) Whether Cenvat credit was admissible to the buyer on duty paid through supplementary invoices issued by the supplier.

Issue (i): Whether the extended period of limitation under Section 11A could be invoked for the differential duty demand.

Analysis: The demand related to clearances made during a period when the valuation dispute arose, but the notice did not disclose any specific act of suppression or intent to evade duty. The record showed that the department initiated investigation only after the assessee itself intimated payment of differential duty on its own computation, and the earlier pricing and clearance pattern had already been within departmental knowledge. In the absence of a substantiated allegation of suppression, the extended limitation could not be sustained.

Conclusion: The invocation of the extended period was unjustified, and the differential duty demand was barred by limitation.

Issue (ii): Whether Cenvat credit was admissible to the buyer on duty paid through supplementary invoices issued by the supplier.

Analysis: The supplier had paid the differential duty and issued supplementary invoices. The denial of credit was based on the view that the relevant rules did not permit credit on such invoices. However, the exception disallowing credit applied only where the additional duty arose from fraud, collusion, wilful misstatement, or suppression of facts. Since no such basis for invoking extended limitation was made out, the bar to credit did not apply. The Tribunal also relied on the accepted position that credit on supplementary invoices was allowable even prior to the later notification relied upon by the parties.

Conclusion: Cenvat credit on the supplementary invoices was admissible to the buyer.

Final Conclusion: The entire demand and the denial of credit were unsustainable, and the impugned order was set aside.

Ratio Decidendi: In the absence of proved suppression or intent to evade duty, the extended period cannot be invoked, and credit on supplementary invoices cannot be denied merely because the supplier subsequently paid differential duty.

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