2026-VIL-1052-CAL-CE
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CENTRAL EXCISE High Court Cases

Central Excise – Failure to disclose shortages or excesses reflected in the Cost Audit Report, Invocation of extended period of limitation under proviso to Section 11A(1) for suppression of facts, Relevance of departmental knowledge - Despite possessing full information, Department issued Show Cause Notices invoking extended period claiming appellant suppressed facts by not disclosing shortages. Adjudicating Authority confirmed demand. Commissioner (Appeals) set aside on limitation - Tribunal reversed the order holding extended period available - Whether extended period of limitation under proviso to Section 11A(1) can be invoked based on non-disclosure in statutory returns of matters not required to be disclosed - HELD - Extended period comes into play only when suppression is established or admitted as deliberate act of withholding information. Suppression presupposes person from whom something is kept back and one cannot suppress from another that which the other already possesses. Where Department attends stock verification at assessee's invitation and records physical position, conduct is antithesis of concealment - Statutory returns require no disclosure of shortages or excesses reflected in Cost Audit Report as no column prescribed disclosure thereof. Demand built entirely on statutory record which assessee bound to prepare, preserve and produce cannot simultaneously be demand built on suppression – The extended period unavailable where entire basis of demand is information in assessee's own books, financial statements or statutory records – Further, the Show Cause Notice must specifically plead ingredients of suppression so assessee may meet allegation. Single sentence averment identifying no fact suppressed, no obligation breached, no act of concealment and no intent to evade is insufficient. – The extended period not available and the demand is barred by limitation of one year – The order passed by the Tribunal is set aside and the appeal is allowed
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