Extended limitation and clubbing of clearances fail where the show cause notice lacks specific allegations and proper pleadings.

An excise demand was held unsustainable where the show cause notice did not specifically allege suppression or concealment of material facts, so the extended limitation period under the proviso to Section 11A could not be invoked. The authority could not go beyond the notice to sustain a time-barred demand. Clubbing of clearances of another unit was also rejected because the notice did not allege that unit to be a dummy unit and no notice was issued to that unit or its director on a clubbing basis. The duty demand and penalty were therefore set aside.

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Issues: (i) Whether the demand was barred by limitation and whether the extended period could be invoked in the absence of specific allegations of suppression in the show cause notice. (ii) Whether clubbing of clearances of another unit could be sustained when the notice did not allege that unit to be a dummy unit and no notice was issued to that unit or its director.

Issue (i): Whether the demand was barred by limitation and whether the extended period could be invoked in the absence of specific allegations of suppression in the show cause notice.

Analysis: The notice covered a period much earlier than its issue and, on the record, no specific allegation of intentional suppression or concealment of material facts was made in the notice. The extended period under the proviso to Section 11A can be applied only when the requisite ingredients are specifically pleaded and put to the assessee. The adjudicating authority could not travel beyond the scope of the notice to sustain an otherwise time-barred demand.

Conclusion: The demand was barred by limitation and the invocation of the extended period was unsustainable, in favour of the assessee.

Issue (ii): Whether clubbing of clearances of another unit could be sustained when the notice did not allege that unit to be a dummy unit and no notice was issued to that unit or its director.

Analysis: The notice alleged misuse of exemption by the partner and referred to the other firm, but it did not specifically assert that the other firm was a dummy unit whose clearances were liable to be clubbed with the appellant's clearances. Since no notice was issued to that firm or its director on the footing that their clearances were to be clubbed, the adjudicating authority could not validly order clubbing and confirm the demand on that basis.

Conclusion: The clubbing of clearances was not sustainable, in favour of the assessee.

Final Conclusion: The duty demand and penalty were set aside because the notice did not support invocation of the extended limitation period and did not validly sustain clubbing of clearances against the assessee.

Ratio Decidendi: An extended period demand cannot be sustained unless suppression or similar grounds are specifically alleged in the show cause notice, and clubbing of clearances cannot be ordered against a unit without proper notice and clear pleadings supporting that course.

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