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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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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, and whether the penalty based on such invocation could survive.
Analysis: The assessee had filed RT-12 returns, proforma invoices and G.P.1 documents, and the proforma invoices disclosed that the goods were being cleared from the factory to the depot. On those facts, the department was already aware of the movement of goods. The assessee was not under a legal obligation to disclose the depot sale price after clearance, and the department, if it required further particulars, could have called for them before final assessment. The principle applied was that suppression requires a deliberate omission of a fact which the assessee was bound to disclose, with intent to evade duty; a mere omission to volunteer information that the law did not require cannot amount to wilful suppression. Since the material facts were known to the department, the foundation for the extended limitation period was absent.
Conclusion: The extended period of limitation was not invocable, and the allegation of wilful suppression failed. The penalty was therefore unsustainable.
Ratio Decidendi: Suppression for purposes of extended limitation requires a deliberate withholding of a legally required material fact with intent to evade duty; where the department already knows the essential facts and no legal duty exists to disclose the omitted information, extended limitation and consequential penalty cannot be sustained.
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