Limitation in duty demand disputes fails where advance authorisation disclosures and departmental acknowledgments negate suppression of facts.

Duty demand, interest and penalty were held time-barred because the department had relied on the extended period without proving suppression or mis-declaration. The record showed that the assessee had disclosed procurement of duty-free inputs under advance authorisation by letter, enclosed the application and bond, and obtained departmental acknowledgment; later correspondence also stated that procedure had not been violated. On these facts, the extended limitation period was unjustified and the demand was not sustainable.

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Issues: Whether the duty demand, interest and penalty were barred by limitation on the ground that the appellant had disclosed the procurement of duty-free inputs under advance authorisation and there was no suppression of facts.

Analysis: The demand related to the year 2008, while the show cause notice was issued in 2013 and therefore proceeded on the extended period. The record showed that the appellant had informed the department by letter dated 21.11.2008 about procurement of materials under advance authorisation, had enclosed the relevant application and bond, and had obtained departmental acknowledgment. Subsequent letters also clarified that there was no violation of the procedure. On these facts, the finding of suppression or mis-declaration was not sustainable, and invocation of the extended period was unjustified.

Conclusion: The demand was hit by limitation and was not sustainable; the assessee succeeded on the limitation issue.

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