Full disclosure defeats suppression: extended excise limitation cannot be invoked, and writ relief remains available against patent error.

Full disclosure of the transfer of modvat inputs between units prevented any inference of suppression, so the extended limitation period under Section 11A of the Central Excise Act could not be invoked and the demand was barred by limitation. The High Court also held that a writ petition remained maintainable despite the alternative remedy under Section 35G because the Tribunal's finding on suppression disclosed a patent error apparent on the record. On that basis, the Tribunal's order was set aside and the assessee succeeded.

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Issues: (i) whether the extended period of limitation under Section 11A of the Central Excise Act could be invoked on the ground of suppression of facts in relation to transfer of modvat inputs between units; (ii) whether the writ petition was maintainable despite the availability of an alternative remedy under Section 35G of the Central Excise Act.

Issue (i): whether the extended period of limitation under Section 11A of the Central Excise Act could be invoked on the ground of suppression of facts in relation to transfer of modvat inputs between units.

Analysis: The assessee had disclosed to the Department that inputs received in one unit were being transferred to another unit for use in manufacture of final products. That disclosure was treated as a full and complete intimation of the practice adopted. Once the Department was made aware of the movement of inputs, absence of immediate action within the normal limitation period could not justify invocation of the extended period unless suppression was established. The conclusion of suppression recorded by the Tribunal was found unsustainable because it ignored the earlier disclosure and proceeded on an unreasonable appreciation of the record.

Conclusion: The extended period under Section 11A was not available and the demand for the relevant period was barred by limitation.

Issue (ii): whether the writ petition was maintainable despite the availability of an alternative remedy under Section 35G of the Central Excise Act.

Analysis: The challenged order was found to suffer from a patent error apparent on the face of the record, inasmuch as the Tribunal's finding on suppression was not capable of being reached by any reasonable process of logic. In such circumstances, the existence of an alternative statutory remedy did not bar the exercise of writ jurisdiction.

Conclusion: The writ petition was maintainable and the Tribunal's order was liable to be set aside.

Final Conclusion: The Tribunal's order was set aside and the assessee succeeded because suppression was not established and the extended limitation could not be applied.

Ratio Decidendi: Where the assessee has made a full disclosure of the relevant facts, suppression cannot be inferred for invoking the extended limitation period, and a writ court may interfere despite an alternative remedy if the impugned order reflects a patent error apparent on the record.

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