Limitation under central excise: disclosed process and bona fide belief defeated extended period for duty demand.

Central excise duty demand was challenged on limitation, with the key issue being whether suppression of facts with intent to evade duty justified the extended period. The mixing of bought-out fine crumb rubber with sulphur/yellow powder and Finawax C had been disclosed to the department through contemporaneous correspondence, showing departmental awareness of the activity. The assessee's bona fide belief that the process did not amount to manufacture was accepted, so the extended limitation period was not available. The demand was therefore treated as time-barred and unsustainable.

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Issues: Whether the demand of central excise duty was barred by limitation on account of absence of suppression of facts with intent to evade duty.

Analysis: The activity of mixing bought-out fine crumb rubber with sulphur/yellow powder and Finawax C was found to have been disclosed to the department through contemporaneous correspondence. On that basis, the department was held to have been aware of the activity, and the assessee's bona fide belief that the process did not amount to manufacture was accepted. In these circumstances, invocation of the extended period was not sustainable.

Conclusion: The demand was held to be time-barred and unsustainable on limitation.

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