Limitation in central excise turns on disclosed facts: prior declarations defeated suppression and barred the extended period.

Disclosure of free supply of packing material by the customer, made in declarations under Rule 173(b) and Rule 173(c) of the Central Excise Rules, 1944, was treated as sufficient notice to the department. On those facts, suppression of material facts could not be alleged to invoke the extended period, because the relevant information was already within departmental knowledge. As the show cause notice was issued after the normal limitation period, the demand for the period beyond one year was held time barred and the extended-period demand was set aside in favour of the assessee.

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Issues: Whether the demand was barred by limitation in view of the appellant's disclosure to the department regarding free supply of packing material by the customer.

Analysis: The appellant had filed declarations under Rule 173(b) and Rule 173(c) of the erstwhile Central Excise Rules, 1944, stating that laminated paper sleeves were supplied free of cost by the customer and that there was no impact on assessable value. On these facts, the Tribunal found that the material facts were already within the knowledge of the department and, therefore, suppression of facts could not be alleged to justify invocation of the extended period. As the show cause notice was issued after the normal period, the demand for the period beyond one year was held to be time barred.

Conclusion: The limitation plea succeeded and the demand for the extended period was set aside in favour of the assessee.

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