Extended limitation in central excise fails where disclosures were made and the dispute was only about classification.

Extended limitation under the proviso to Section 11A(1) of the Central Excise Act was held unavailable where the assessee had filed declarations, disclosed the manufacturing activity, and the dispute turned on classification rather than concealment. The record did not show wilful suppression or misstatement with intent to evade duty, and the department already had access to the relevant facts. In a bona fide classification dispute, the jurisdictional basis for invoking the extended period is not made out, so the demand is barred by limitation.

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Issues: Whether the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 was invocable on the facts, and consequently whether the demand could be sustained.

Analysis: The materials on record showed that the assessee had filed declarations describing the goods, had disclosed the manufacturing activity in its dealings with the buyer and other authorities, and the dispute essentially arose from differing views on classification. The record did not establish deliberate concealment of the nature of the goods with intent to evade duty. In a bona fide classification dispute, where the department had access to the relevant facts and the assessee had made declarations, the jurisdictional basis for the extended period was not made out.

Conclusion: The extended period of limitation was not invocable, and the demand was barred by limitation.

Ratio Decidendi: Extended limitation cannot be applied in the absence of wilful suppression or misstatement with intent to evade duty, particularly where the assessee has made relevant disclosures and the dispute is one of classification.

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