Extended limitation under excise law requires positive suppression or misstatement; disclosed records barred the demand as time-barred.

Modvat credit reversal was held time-barred because the assessee had disclosed the claim in the RT-12 return, enclosed the relevant RG 23A extracts, and produced the Superintendent's certificate showing the goods were rejected goods. As the return was scrutinised and approved by the department, the material facts were already before it, and mere failure to notice the documents could not amount to suppression. For invocation of the extended limitation period under Rule 57-I of the Central Excise Rules, 1944, a positive act of misstatement, collusion, or suppression is required; absent that, the extended period is unavailable.

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Issues: Whether the demand for Modvat credit reversal was barred by limitation and whether the extended period could be invoked on the allegation of suppression or misstatement.

Analysis: The appellant had taken credit, reflected it in the RT-12 return, enclosed the relevant extracts of RG 23A Parts I and II, and produced the Superintendent's certificate showing that the goods were rejected goods. The return was scrutinised and approved by the department. In such circumstances, the material facts were before the department and there was no suppression. Mere failure to notice the documents at the time of scrutiny could not justify recourse to the extended period. For invocation of the extended period under Rule 57-I of the Central Excise Rules, 1944, there must be a positive act of misstatement, collusion, or suppression.

Conclusion: The demand was barred by limitation and the extended period was not available. The finding is in favour of the assessee.

Ratio Decidendi: Where the assessee has disclosed the relevant facts in statutory returns and supporting records, the department cannot invoke the extended period of limitation merely because it failed to detect the claim during scrutiny; suppression or misstatement requires a positive attributable act.

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