Extended limitation in central excise cannot rest on classification ; absence of suppression or intent makes the demand time-barred.

The extended limitation period for central excise duty demands was not available because the statutory prerequisites of fraud, collusion, wilful misstatement, suppression of facts, or intent to evade duty were neither clearly pleaded nor established. The department had knowledge of the relevant facts, yet issued the notices only after a substantial delay, and the dispute arose from a later change of view on classification and exemption applicability rather than any deliberate act by the assessee. Mere disagreement over the nature of inputs or exemption eligibility could not justify invocation of the proviso to the limitation provision, so the demand was time-barred.

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Issues: Whether the extended period of limitation under the proviso to Section 11A of the Central Excise Act could be invoked for the duty demands in the absence of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty.

Analysis: The demands related to an earlier period but were raised only after a substantial delay. The material on record showed that the department itself had taken conflicting positions on the nature of the inputs and on the applicability of the exemption under Notification No. 202/88-C.E. The notices were not issued within the normal limitation period despite the department's knowledge of the relevant facts, and the delay resulted from a change of view on classification rather than from any deliberate act by the assessee. For invocation of the proviso to Section 11A, the specific statutory ingredients had to be clearly alleged and established. Mere difference of opinion on the classification of inputs could not justify use of the extended period.

Conclusion: The extended period under the proviso to Section 11A was not invocable. The duty demand was time-barred and the appeals succeeded.

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