Extended period cannot be invoked, if details of clearance made without payment of duty to 100% EOU were already informed to Department vide CT-3 certificates
In the instant case, Blue Star Ltd. (the Respondent) was engaged in manufacturing of air-conditioning machinery and parts thereof. Some of the air-conditioning units were sent to to 100% Export Oriented Units (EOU) without payment of duty under CT-3 certificates and the copies of same was filed with the Department. The Department invoked extended period of limitation on ground that it was not informed that clearances were made to 100% EOU without payment of duty, which amounts to suppression of material facts.
The Hon’ble Supreme Court held that since CT-3 certificates were filed before the Department, no clearance could have taken place without the knowledge of the officer as to the ultimate destination of the goods and the fact that they were cleared without payment of duty in terms of the exemption notification, which was specified in the application.
Hence, charge of suppression was invalid and, consequently, extended period of limitation could not have been invoked.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)