Limitation under excise rules failed where captive consumption was not properly disclosed and Rule 9(2) applied to the demand.

Captive consumption of cushion compound in tread rubber manufacture was treated as a clearance in contravention of Rule 9(1) because the assessee had not disclosed the goods in proper assessment documents; stock registers and RT-12 returns were not enough to amount to presentation for assessment. On that basis, Rule 9(2) applied rather than Rule 10, and the notice was accepted as a valid written demand because it identified the period, quantity, and duty amount. The later amendment to Rule 9(2) did not affect proceedings already initiated, so the limitation objection failed and the demand was not time-barred.

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Issues: Whether the demand of central excise duty on cushion compound used captively in the manufacture of tread rubber was barred by time and whether Rule 9(2) of the Central Excise Rules, 1944 was rightly invoked.

Analysis: The substantive question of dutiability stood concluded by earlier tribunal and High Court decisions, and the remaining controversy concerned limitation. The Tribunal held that the assessee had not disclosed, in the proper assessment documents, the captive consumption of the goods for which duty was demanded, and that mere entries in stock registers or RT-12 returns did not amount to a presentation for assessment within Rule 9(1). On that basis, the case was treated as one of clearance in contravention of Rule 9(1), attracting Rule 9(2), rather than a mere short levy under Rule 10. The notice dated 13-9-1974 was also held to be a valid written demand because it specified the period, quantity, and amount of duty, and the later amendment to Rule 9(2) did not curtail the proceedings already initiated.

Conclusion: The limitation objection failed, Rule 9(2) was applicable, and the demand was not time-barred.

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