Suppression of facts and extended limitation: departmental knowledge of raw materials defeated invocation of the extended period.

The extended limitation period could not be invoked because the facts did not show suppression of material particulars about the raw materials used in manufacture. Runners and risers were entered in the raw materials register, the register was signed by Central Excise officers, and the audit report showed departmental awareness of the materials used. Since the classification list contained no column for raw-material particulars, and the obligation to furnish such information under Rule 173D arose only when required by the Collector, omission of those particulars from the classification list did not amount to suppression. On that basis, the demand was held to be barred by limitation.

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Issues: Whether the demand of duty was barred by limitation and whether the extended period under Section 11A(1) could be invoked on the ground of suppression of facts regarding the raw materials used.

Analysis: The record showed that runners and risers were entered in the raw materials register and that the register had been signed by Central Excise officers, while the audit report also indicated departmental awareness of the materials used in manufacture. The classification list did not provide a column for raw-material particulars, and the obligation under Rule 173D arose only where the Collector required such information to be furnished. On these facts, the omission to mention the raw materials in the classification list did not establish suppression of facts, and the department could not lawfully invoke the extended limitation period.

Conclusion: The invocation of the extended period of limitation was not sustainable, and the demand was set aside in favour of the assessee.

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