Extended limitation cannot be invoked without suppression; job-work mould liability and confiscation issues were remanded.

Repeated correspondence and prior departmental awareness of the job-work arrangement meant there was no material to establish deliberate suppression or collusion, so invocation of the extended limitation period was not justified and the related penalties did not survive. The moulds were accepted as having been manufactured by the job worker on the basis of declarations and supporting statements, but the actual duty liability and confiscation consequences still depended on compliance with the relevant notification conditions governing movement, receipt and use. The remaining issues relating to the normal period demand, duty computation and seized goods were remanded for fresh adjudication by the jurisdictional authority.

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Issues: (i) Whether the demand for the extended period was barred by limitation in view of the department's prior knowledge and correspondence. (ii) Whether the moulds were manufactured by the job worker or by the principal manufacturer, and the consequential liability to duty and confiscation. (iii) Whether the matters relating to the normal period demand and the seized goods required fresh adjudication.

Issue (i): Whether the demand for the extended period was barred by limitation in view of the department's prior knowledge and correspondence.

Analysis: The record showed repeated correspondence between the assessee and the department regarding movement of raw materials and the job-work arrangement, including permissions earlier granted and later withdrawn. The department had been aware of the operational arrangement for a long period. In these circumstances, the Tribunal found it difficult to accept any deliberate suppression or collusion so as to justify invocation of the extended period.

Conclusion: The extended period demand was held to be time-barred and the related penalties were not sustained.

Issue (ii): Whether the moulds were manufactured by the job worker or by the principal manufacturer, and the consequential liability to duty and confiscation.

Analysis: The declarations filed with the department described the final goods as moulds manufactured by the job worker, and the statements of the technical staff and persons associated with both units supported completion of manufacture at the job-worker's premises. The Tribunal accepted, for purposes other than the time-barred demand, that the moulds were manufactured by the job worker. However, the actual liability depended on compliance with the notification conditions governing movement, receipt, and captive use or duty-paid clearance.

Conclusion: The moulds were held to have been manufactured by the job worker, but the precise duty liability and confiscation consequences were left for determination under the notification framework.

Issue (iii): Whether the matters relating to the normal period demand and the seized goods required fresh adjudication.

Analysis: Since the bulk of the demand was set aside on limitation, the Tribunal found it necessary to remit the remaining issues concerning the normal period demand, the computation of duty, and the liability of the seized goods for confiscation. The jurisdictional authority was directed to examine the facts afresh and decide the surviving issues after hearing the parties.

Conclusion: The surviving demand and confiscation issues were remanded for fresh adjudication.

Final Conclusion: The appeal succeeded in substantial part by setting aside the extended-period demand and associated penalties, while the remaining duty and confiscation questions were sent back for reconsideration by the jurisdictional authority.

Ratio Decidendi: Where the department has long been aware of the job-work arrangement and the assessee's dealings with it, and the record does not establish deliberate suppression, the extended period of limitation cannot be invoked.

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