Departmental supervision defeats suppression plea; extended recovery period unavailable and belated notice amendment rejected

Exports made under bond and processed through prescribed departmental procedure, with examination and certification by excise officers, were held to be within departmental knowledge, so suppression of facts could not be attributed to the assessee. On that basis, the extended period for recovery was not available and the demand was time-barred. A belated miscellaneous application seeking amendment of the Review Show Cause Notice was also rejected because it attempted to go beyond the original notice and was filed after an unexplained delay.

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Issues: (i) Whether the miscellaneous application seeking amendment of the Review Show Cause Notice could be allowed; (ii) whether the extended period for recovery could be invoked on the ground of suppression of facts.

Issue (i): Whether the miscellaneous application seeking amendment of the Review Show Cause Notice could be allowed.

Analysis: The amount proposed to be recovered in the amendment application was the same as that stated in the original show cause notice and in the adjudication order, while the proposed amendment went beyond the original notice. The application was also filed after a long delay, with no satisfactory explanation for the time gap.

Conclusion: The amendment application was not allowable and was rejected, against the assessee.

Issue (ii): Whether the extended period for recovery could be invoked on the ground of suppression of facts.

Analysis: The exports were effected under bond and through the prescribed departmental procedure, with examination and certification in the relevant forms by the excise officers. In these circumstances, the exports were within departmental knowledge and supervision, and suppression of the exports could not be attributed to the assessee. The facts did not justify treating the matter as one discovered only through audit scrutiny.

Conclusion: The extended period for recovery could not be invoked, and the demand was time-barred, in favour of the assessee.

Final Conclusion: The challenge failed on limitation and the attempt to enlarge the show cause notice also failed, so the demand could not be sustained.

Ratio Decidendi: Where exports are made under bond under departmental supervision, the department cannot invoke the extended period on a plea of suppression of facts; a belated amendment sought beyond the original notice may also be rejected for delay and for travelling beyond the scope of the notice.

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