No Extended Limitation or Penalty Where Clearance Details Were Disclosed in ER-1 Returns: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the extended period of limitation cannot be invoked to demand tax, nor can a penalty be imposed, when the assessee had disclosed all the relevant details of their clearances in their ER-1 returns. The department had sought to raise a demand after the normal limitation period had expired, alleging suppression of facts. However, the tribunal found that the assessee had been regularly filing their returns with all the required information. It held that once the details are available in the statutory returns, the department cannot claim that there was any suppression of facts. The CESTAT emphasized that it is the duty of the department to scrutinize the returns in a timely manner, and their failure to do so cannot be a ground to invoke the extended limitation period.