Extended limitation fails where departmental knowledge precludes alleging suppression for CENVAT credit recovery after destroyed goods and records.

Extended limitation could not be invoked to recover CENVAT credit on inputs and capital goods destroyed in industrial violence and fire where the Department had contemporaneous knowledge of the incident, stock particulars, asset destruction and loss of records. Having sought details, conducted physical verification and issued an earlier show-cause notice on the same incident, the Department could not treat the same or similar facts as suppression in a later notice. The demand was therefore time-barred, and the related interest and penalty could not survive.

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Issues: Whether the extended period of limitation could be invoked to recover CENVAT credit in respect of inputs and capital goods destroyed in the industrial violence and fire.

Analysis: The Department had contemporaneous knowledge of the incident, the destruction of goods and assets, the stock particulars, and the loss of records. It had sought and received relevant details, conducted physical verification, and earlier issued a show-cause notice concerning the same incident. The same or similar facts could not thereafter constitute suppression of facts for invoking the extended limitation period in the subsequent notice. Once the demand was found time-barred, adjudication on merits was unnecessary; the associated interest and penalty could not survive.

Conclusion: The extended period of limitation was not invocable; the demand was wholly time-barred, and the related interest and penalty were unsustainable.

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