Suppression cannot extend limitation when Modvat credit entries were already in the assessee's records and known to officers.

The extended period for recovery of wrongly taken Modvat credit could not be invoked where the relevant entries and records were already available with the assessee and had come to the knowledge of the jurisdictional officers. Suppression of facts requires non-disclosure of material facts before the Excise authorities; mere inaction after those facts were on record cannot be treated as suppression for limitation purposes. The demand was therefore time-barred, and the assessee obtained consequential relief.

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Issues: Whether the extended period for recovery of wrongly taken Modvat credit could be invoked on the ground of suppression of facts when the relevant entries were available in the assessee's records and had come to the knowledge of the jurisdictional officers.

Analysis: Suppression can be alleged only when the material facts indicating wrongful availment are not before the Excise authorities. Where the relevant register and documents disclose the taking of credit and the jurisdictional officers had access to them, failure to act at that stage cannot be converted into suppression for the purpose of extending limitation. The demand was therefore not sustainable on the basis of the extended period.

Conclusion: The extended period was not available and the demand was time-barred.

Final Conclusion: The assessee succeeded on the limitation issue, and the demand was set aside with consequential relief.

Ratio Decidendi: When the department already has knowledge of the relevant facts from the assessee's records, a charge of suppression cannot be used to invoke the extended period of limitation.

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