Excise limitation and export exemption: wilful suppression extends time, but later-disclosed demand is time-barred and resale exports do not qualify.

Under rule 10 as it then stood, the extended five-year limitation applied where short levy resulted from wilful suppression of material facts, but the ordinary six-month period applied once the assessee had disclosed the relevant figures. On the stated facts, the demand was timely for the period up to 3-4-1979 and time-barred for 4-4-1979 to 10-4-1979. Goods cleared for home consumption did not become export clearances merely because purchasers later exported them, so those clearances could not be excluded from the exemption computation.

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Issues: (i) whether the demand was time-barred for the entire period or only for the period after the assessee disclosed the relevant figures to the department; (ii) whether goods sold within India and later exported by purchasers could be treated as exported goods for claiming exclusion from assessable clearances under the exemption notification.

Issue (i): whether the demand was time-barred for the entire period or only for the period after the assessee disclosed the relevant figures to the department.

Analysis: The notice was governed by rule 10 as it then stood. Where duty was short-levied by reason of wilful suppression of material facts, the department could invoke the extended period of five years. On the facts, the assessee had not furnished the necessary figures till 4-4-1979, and till then the removal of goods was without the required excise formalities and with suppression of relevant facts. For the later period, after disclosure on 4-4-1979, there was no suppression and the ordinary six-month period applied.

Conclusion: The demand was within time for the period up to 3-4-1979 and barred by limitation for the period from 4-4-1979 to 10-4-1979.

Issue (ii): whether goods sold within India and later exported by purchasers could be treated as exported goods for claiming exclusion from assessable clearances under the exemption notification.

Analysis: The goods were cleared by the assessee for home consumption and not directly for export. Subsequent export by purchasers did not make those clearances exports by the assessee for purposes of duty exemption. The assessee therefore could not exclude those clearances from the quantity relevant to the exemption computation.

Conclusion: The claim for exclusion of those clearances as exported goods was rejected.

Final Conclusion: The duty demand was upheld substantially, with only the later period excluded from the demand on limitation grounds, and the valuation exemption claim was disallowed.

Ratio Decidendi: For excise demand under rule 10, the extended limitation applies where non-disclosure amounts to wilful suppression of material facts, and goods sold for home consumption do not become export clearances merely because purchasers later export them.

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