Clerical errors in statutory returns cannot sustain excise demands where supporting records disclose the correct clearances and negate suppression.

An excise duty demand based on an ER-1 return entry was unsustainable because the return, read with the excise invoice, showed that only the quantity cleared for home consumption was duty-paid and the balance was exported under bond; the reported aggregate home-clearance quantity was a genuine typographical error. Extended limitation was also unavailable because the filed return and supporting records disclosed the relevant quantities and duty payment, the discrepancy was apparent to the department, and suppression was not established. The demand therefore failed on both merits and limitation.

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Issues: Whether excise duty demand based on an erroneous ER-1 return entry showing 85,160 kg as home-consumption clearance was sustainable; and whether the extended limitation period was invocable.

Issue (i): Whether excise duty demand based on an erroneous ER-1 return entry showing 85,160 kg as home-consumption clearance was sustainable.

Analysis: The ER-1 records, read harmoniously with the excise invoice, established that only 4,160 kg of wax was cleared for home consumption on payment of duty, while 81,000 kg was exported under bond. The entry of 85,160 kg as home-consumption clearance was a genuine typographical error.

Conclusion: The demand founded on the erroneous home-clearance quantity was unsustainable, in favour of the assessee.

Issue (ii): Whether the extended limitation period was invocable.

Analysis: The ER-1 return was filed and disclosed the relevant quantities and duty payment. The discrepancy was apparent from the return, but the department did not raise it for over two years before issuing the show-cause notice. Suppression was not established.

Conclusion: Invocation of the extended limitation period was invalid, in favour of the assessee.

Final Conclusion: The excise duty demand was unsustainable both on merits and on limitation.

Ratio Decidendi: Where statutory returns and supporting records disclose a discrepancy attributable to a genuine clerical error, and the material is available to the department, suppression cannot be invoked to sustain demand through the extended limitation period.

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