Excise detention and extended limitation upheld where suppression and lack of bona fide disclosure defeated the challenge.

Detention of plant and machinery and the consequential excise demand were upheld against the lessor because the unit remained in the lessee's possession when duty was unpaid, the alleged surrender was not shown to be bona fide, and Rule 230 allowed detention in those circumstances. The objection that the lessor was not in possession was rejected. Limitation was also negatived because the facts disclosed suppression and lack of bona fide disclosure, bringing the case within the extended five-year period under the excise limitation proviso rather than the normal six-month period. The recovery was therefore not time-barred and the writ petition failed.

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Issues: (i) Whether the detention and consequent demand could be sustained against the lessor in respect of duty liability incurred by the lessee. (ii) Whether the recovery was barred by limitation under the excise law.

Issue (i): Whether the detention and consequent demand could be sustained against the lessor in respect of duty liability incurred by the lessee.

Analysis: The detention of plant and machinery was made while the lessee was in possession, and the record did not establish a bona fide disclosure of the alleged surrender of the unit before the departmental authorities or before the earlier challenge to the detention order. On the facts found, the transaction was not accepted as bona fide, and Rule 230 permitted detention of the plant and machinery in the circumstances of unpaid duty. The objection that the lessor was not in possession on the relevant date was therefore rejected.

Conclusion: The detention and consequential demand were valid and enforceable against the petitioner.

Issue (ii): Whether the recovery was barred by limitation under the excise law.

Analysis: Although the normal period under Section 11A is six months, the Court held that the case fell within the proviso because the facts disclosed suppression and lack of bona fides. In such a situation, the extended period of five years applied, and the departmental action taken in 1991 was not time-barred.

Conclusion: The plea of limitation was rejected, and the recovery was not barred.

Final Conclusion: The writ petition failed in full, as the impugned excise proceedings were upheld on merits and on limitation.

Ratio Decidendi: Where duty liability is accompanied by suppression or lack of bona fide disclosure, the extended limitation period applies and detention under the excise recovery machinery can be sustained against the succeeding possessor in accordance with the statutory rule.

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