Marble slab duty demand fails where tariff conversion formula is unproved and extended limitation lacks evidence of suppression.

Duty demand on rough marble slab clearances was found unsustainable because the assessee applied the tariff-prescribed conversion option under Chapter Note 5, while the department relied only on invoice details and a presumed formula error without comparative working or supporting evidence. The extended period of limitation was also held unavailable, as records were on file and returns were filed on self-assessment; mere audit detection of short payment, without proof of suppression, fraud, collusion, or wilful intent to evade duty, could not justify extended limitation. The demand was therefore barred on both merits and limitation.

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Issues: (i) Whether the duty demand based on the alleged incorrect conversion formula for rough marble slabs was sustainable. (ii) Whether the extended period of limitation could be invoked on the facts of the case.

Issue (i): Whether the duty demand based on the alleged incorrect conversion formula for rough marble slabs was sustainable.

Analysis: The appellant manufactured marble slabs from rough marble blocks and had cleared goods by availing the option under Chapter Note 5 of Chapter 25 of the First Schedule to the Central Excise Tariff Act, 1985. The record showed that the conversion was made under the tariff-based formula, while the department's objection rested on invoices showing quantity in square meters without thickness particulars and on a presumed conversion error. In the absence of comparative working, supporting evidence, or material demonstrating that the tariff formula had been wrongly applied, the objection was held to be presumptive.

Conclusion: The demand on merits was not sustainable and was decided in favour of the assessee.

Issue (ii): Whether the extended period of limitation could be invoked on the facts of the case.

Analysis: The records were available and the returns had been filed on the basis of the appellant's self-assessment. Mere discovery of a short payment during audit, without proof of deliberate suppression, fraud, collusion, or wilful intent to evade duty, was held insufficient to justify the extended limitation period. The finding was supported by the settled principle that suppression must be strictly construed and cannot be inferred from mere omission or audit detection alone.

Conclusion: The extended period was wrongly invoked and the demand was barred by limitation, in favour of the assessee.

Final Conclusion: The duty demand could not be sustained either on merits or on limitation, and the impugned order was set aside.

Ratio Decidendi: Where an assessee's clearance is made under a tariff-prescribed conversion option and the department fails to produce evidence showing misapplication of that formula, a duty demand based on conjecture cannot stand; similarly, the extended period requires proof of deliberate suppression or intent to evade duty, not merely an audit-based detection of short payment.

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