Balance-sheet disclosure defeats suppression and bars extended limitation, penalty, and interest under central excise law.

Publicly available balance-sheet disclosures defeated the allegation of suppression, so the extended limitation period could not be invoked under the Central Excise Act. On that basis, penalty under section 11AC and interest under section 11AB were also unsustainable. The Tribunal further held that where inputs remained in the factory and had merely been written off in the books, credit could not be denied on a presumption that they were unusable. The appeal was allowed and the impugned order was set aside.

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Issues: Whether the extended period of limitation could be invoked on the basis of alleged suppression when the relevant facts were reflected in the balance sheet, and whether penalty under section 11AC and interest under section 11AB could be imposed on that basis.

Analysis: The appeal concerned goods lying in the factory and components cleared after an application for remission under Rule 196B read with Rule 173P of the Central Excise Rules. The demand was founded on information appearing in the balance sheet, which was a publicly available document. On that footing, the alleged suppression was not sustainable. The Tribunal also held that where the inputs were still lying in the factory and had only been written off in the books, credit could not be denied on a mere presumption that the inputs could not be used. In these circumstances, the prerequisites for invoking the extended period and for imposing penalty and interest were absent.

Conclusion: The extended period under section 11A(1) of the Central Excise Act, 1944 was not invokable, and the demand of penalty under section 11AC and interest under section 11AB was unsustainable. The appeal was allowed and the impugned order was set aside.

Ratio Decidendi: Allegations of suppression cannot be sustained where the material facts are already disclosed in publicly available balance-sheet records, and in the absence of such suppression the extended limitation period, penalty, and interest under the Central Excise Act cannot be invoked.

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