Excisability at the manufacturing stage sustained, with duty and extended limitation upheld where suppression supported the demand.

Duty was payable on HDPE/PP tapes at the tape stage, and liability could not be recomputed by reference to the later woven fabric weight or by excluding loom-stage wastage. The Tribunal treated the tapes as excisable goods at the earlier manufacturing stage and applied prior decisions on the same issue, sustaining the demand on merits. It also accepted that the assessee's own records and alleged misstatements showed suppression of the true accounting basis, so the extended period of limitation was correctly invoked. The appeal was dismissed on both merits and limitation.

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Issues: (i) Whether duty was payable on the full quantity of HDPE/PP tapes transferred from the spinning section to the weaving section, and whether the loom-stage wastage could be excluded; (ii) Whether the demand was barred by limitation and whether suppression of facts justified invocation of the extended period.

Issue (i): Whether duty was payable on the full quantity of HDPE/PP tapes transferred from the spinning section to the weaving section, and whether the loom-stage wastage could be excluded.

Analysis: The duty was payable at the tape stage. The arrangement sought by the assessee for working out duty on the basis of woven fabric weight did not alter the excisability of the tapes. The record showed that spindle-stage wastage was not the subject matter of the notice and the dispute was confined to loom-stage wastage. The Tribunal also relied on earlier decisions on the same issue and found those authorities applicable.

Conclusion: The assessee's challenge on merits failed and duty on the tapes was sustained in favour of the Revenue.

Issue (ii): Whether the demand was barred by limitation and whether suppression of facts justified invocation of the extended period.

Analysis: The assessee had requested a facility to compute duty backward, but the notice alleged suppression of the actual tape-stage accounting and wilful misstatements. The demand was supported by the assessee's own private records and related documents, and no material was placed to dislodge that basis. In these circumstances, the Tribunal accepted the finding that the factual suppression warranted the extended period.

Conclusion: The limitation plea was rejected and invocation of the extended period was upheld in favour of the Revenue.

Final Conclusion: The adjudicating authority's view was affirmed on both merits and limitation, and the appeal was dismissed.

Ratio Decidendi: Where excisable goods are assessable at an earlier manufacturing stage, duty cannot be avoided by recomputing liability on a later process stage, and suppression of the true accounting basis supports invocation of the extended period of limitation.

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