Limitation under Rule 56A: extended period unavailable without wilful suppression or intent to evade duty

Demands raised under Rule 56A were held time-barred because the inputs were eligible for proforma credit and the relevant gate passes and D-3 declarations were already verified by the proper officer. In the absence of wilful suppression, misstatement, or intent to evade duty, the extended period under Rule 56A(5)(i) was not available to the department. Since the material facts were available within the normal limitation period, the demands could not be sustained and the revenue appeal failed.

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Issues: Whether the demands raised under Rule 56A were barred by limitation, and whether the extended period under Rule 56A(5)(i) was available to the department.

Analysis: The disputed inputs were otherwise eligible for proforma credit and had been reflected in the gate passes and D-3 declarations verified by the proper officer. In such circumstances, there was no material to show intention to evade duty, nor any wilful suppression or misstatement so as to justify resort to the extended period. Once the department did not act within the normal period despite the materials being available, the demands could not be sustained as within time.

Conclusion: The demands were held time-barred and the extended period under Rule 56A(5)(i) was not available to the department.

Final Conclusion: The revenue appeal failed, and the demand confirmed against the assessee was set aside on limitation.

Ratio Decidendi: The extended period of limitation cannot be invoked in the absence of wilful suppression or intent to evade duty, especially where the relevant facts were available to the department within the normal limitation period.

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