Extended limitation under central excise law fails absent wilful suppression or intent to evade duty; penalty remains undisturbed.

The extended limitation period under the proviso to Section 11A(1) of the Central Excise Act, 1944 was held unavailable because the record did not show wilful suppression, misstatement, or deliberate intent to evade duty. The assessee had disclosed the goods as shells and slides in RT-12 returns and invoices, and those returns were assessed by departmental officers; an incorrect classification claim alone was insufficient to establish the mens rea required for the longer limitation period. On that basis, the Revenue appeal failed on limitation, and the penalty under Rule 173Q of the Central Excise Rules, 1944 was left undisturbed.

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Issues: Whether the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 could be invoked on the facts, and whether the penalty imposed under Rule 173Q of the Central Excise Rules, 1944 required interference.

Analysis: The decisive question was whether the assessee had acted with wilful intent to evade duty by suppressing or misdeclaring the nature of the goods. The declaration in the RT-12 returns and invoices disclosed the goods as shells and slides, the returns were assessed by the departmental officers, and no deliberate withholding from the assessment records was established. The earlier authority relied upon by the Revenue was distinguished on facts because the present record did not show a misdescription in the assessment documents or the kind of deliberate non-disclosure required to attract the larger limitation period. In the changed procedural setting, an incorrect classification claim by itself was held insufficient to establish the requisite mens rea.

Conclusion: The proviso to Section 11A(1) could not be invoked. The Revenue appeal failed on limitation, and the penalty order was not interfered with.

Final Conclusion: The appeal stood dismissed, with the assessee succeeding on the issue of extended limitation and the penalty left undisturbed.

Ratio Decidendi: Invocation of the extended limitation period under Section 11A(1) requires clear proof of wilful suppression, misstatement, or deliberate intent to evade duty; a disputed classification claim accompanied by disclosure in assessment records does not suffice.

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