Extended limitation in excise demand fails where statutory returns disclose material facts and no corroborative evidence proves wrongful clearance.

Excise duty demand based solely on ER-6 returns is described as unsustainable where statutory ER-1 and ER-6 returns already disclosed receipt, removal and closing balance of coal, and the show cause figures matched those disclosures. The note states that, without investigation into coal quality or independent verification showing that Cenvat-availed coal was specifically cleared to third parties, no corroborative evidence supported the allegation. On that reasoning, suppression was not established and invocation of the extended limitation period was negated. The demand is therefore presented as failing both on evidentiary merits and on limitation.

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Issues: Whether the excise duty demand raised on the basis of ER-6 returns and invoking the extended period could be sustained when the relevant facts were disclosed in the statutory returns and no corroborative evidence established clearance of Cenvat-availed coal to third parties.

Analysis: The demand was founded only on the ER-6 returns for the relevant period. The Tribunal found that the ER-1 and ER-6 returns disclosed the receipt, removal and closing balance of coal, and the figures in the show cause notice matched the return data. It also found that no investigation had been made into the quality of the coal mentioned in the invoices, and no verification or independent evidence showed that the Cenvat-availed coal alone had been removed to third parties. In the absence of corroborative evidence, the allegation of suppression was not made out, and the factual disclosures in the returns negatived the invocation of the extended period.

Conclusion: The demand was held unsustainable both on merits and on limitation, and the assessee succeeded.

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