2026-VIL-80-SC-CE
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CENTRAL EXCISE Supreme Court Cases

Central Excise - Extended period of limitation under Section 11A of the Central Excise Act, 1944 - Proviso to Section 11A - Invocation of extended period on ground of suppression when facts are known to both parties - Appellants engaged in body building of motor vehicles on job work basis, receiving chassis from manufacturers on which excise duty was paid at valuation of 110% of cost of manufacture. Appellant clearance of finished motor vehicle computed on sum total of cost of manufacture, directly received raw materials, job work charges and profit of appellant without including 10 percent profit of manufacturer incorporated in chassis valuation under Rule 8 of Central Excise Valuation Rules, 2000 - SCN issued invoking extended period of limitation under proviso to Section 11A alleging wilful misrepresentation and wilful suppression of valuation - Whether extended period of limitation available when facts regarding 110 percent valuation of chassis were known to both Department and assessee - HELD - Extended period of limitation under proviso to Section 11A cannot be invoked on allegation of suppression or misrepresentation merely. The words suppression and misrepresentation are qualified by wilful, which means with intent to evade duty. When facts are known to both parties, omission by one party to do what it might have done would not render it suppression - The Department was fully aware that manufacturers cleared chassis at 110 percent of cost of manufacture and if Department found non-inclusion of 10 percent in duty computation by job worker, it ought to have taken immediate action under Section 11A(1). The proviso cannot be invoked to extend period of limitation when Department failed to act promptly – The SCN dated 30.04.2008 for period 01.11.2004 to 31.03.2007 was beyond one-year period provided under Section 11A(1) and hence demand is barred by limitation – The appeal is allowed
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