Modvat credit limitation turned on disclosed indirect use, so the extended period could not be invoked.

Disclosure in the Modvat declaration that the goods were intended for indirect use could not be treated as suppression or a misleading statement, because the department was already on notice of the claim. The extended period of limitation was therefore unavailable, and the demand for denial of Modvat credit was barred by limitation.

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Issues: Whether the demand for denial of Modvat credit was barred by limitation and the extended period could be invoked on the basis of the declaration of indirect use.

Analysis: The declaration filed by the assessee specifically disclosed that the goods were intended for indirect use. Such disclosure could not be treated as suppression or an attempt to misguide the department. Since the department had notice of the nature of the claim, the extended period of limitation was not available.

Conclusion: The demand was hit by limitation and the invocation of the extended period was unjustified.

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