Exemption notification compliance and suppression: extended limitation applied where clearances were undisclosed and statutory records were not maintained.

An assessee seeking exemption under Notification No. 175/86-C.E. had to comply with all its conditions, including the commodity-specific limit prescribed in the notification. The plea that the department already knew of the clearances was rejected because statutory records were not maintained and the clearances remained undisclosed throughout the year. On those facts, non-compliance with the notification conditions and deliberate suppression justified invocation of the extended period of limitation. The demand and penalty were upheld, and the impugned order was sustained.

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Issues: Whether the assessee was entitled to invoke the benefit of Notification No. 175/86-C.E. without complying with its conditions, and whether the extended period of limitation could be invoked for deliberate suppression of clearances.

Analysis: The exemption notification granted benefit up to the prescribed limit for all commodities, but imposed a lower limit for a single commodity. Having sought the benefit of the notification, the assessee was required to satisfy all of its conditions. The departmental knowledge theory was rejected because the assessee had not maintained statutory records and the clearances remained undisclosed throughout the year. In those circumstances, the failure to observe the notification conditions and the absence of statutory compliance justified invocation of the extended period on the ground of suppression.

Conclusion: The extended period of limitation was rightly invoked and the demand and penalty were upheld against the assessee.

Final Conclusion: The appeal failed on merits and the impugned order was sustained.

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