Suppression and extended limitation under central excise fail where clearances were disclosed and approved under an exemption notification.

Approval of clearance under an exemption notification, together with disclosure in classification lists and RT 12 returns, negatives suppression of facts for central excise limitation purposes. Where the assessee has placed the clearances before the department and there is no evidence of fraud, concealment, or intent to evade duty, the extended period of limitation cannot be invoked merely because the department later takes a different view on exemption eligibility. The operative effect is that the demand cannot be sustained on the basis of extended limitation unless suppression and intent are affirmatively established.

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Issues: Whether the extended period of limitation under the central excise law could be invoked on the allegation of suppression of facts with intent to evade duty, where the assessee had filed a classification list, obtained approval for clearance without duty under an exemption notification, and reflected the clearances in returns.

Analysis: The allegation of suppression was not made out. The assessee had filed a classification list claiming exemption under Notification No. 65/87-C.E., and the competent authority had approved clearances without payment of duty. There was nothing to show that this approval had been obtained by fraud or by concealment of material facts. The record also did not indicate that the clearances were hidden from the department, and the filing of RT 12 returns meant that the department was aware of the clearances. A mere departmental view that the exemption was not available could not, by itself, establish suppression or any intent to evade duty. Since the foundation for invoking the extended limitation period failed, the demand could not be sustained on that basis.

Conclusion: The invocation of the extended period was unjustified, and the demand was barred by limitation. This conclusion is in favour of the assessee.

Final Conclusion: The revenue's challenge to the dropping of the demand failed, while the separate pending dispute on the exemption issue remained unaffected.

Ratio Decidendi: Approval of clearance under an exemption notification, coupled with disclosure in statutory returns, negatives suppression of facts and prevents invocation of the extended limitation period unless concealment and intent to evade duty are affirmatively established.

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