Extended limitation for excise duty requires proof of suppression or misdeclaration; approved classification and exemption defeat the demand.

The extended limitation period for excise duty cannot be invoked unless the department proves a positive act of suppression or misdeclaration with intent to evade duty. Where the assessee had cleared goods under an approved classification list and the exemption benefit had already been approved by the department, all material facts were before the authority and no such suppression was established. The demand, raised long after the relevant period, was therefore time-barred and the extended period under section 11A was unavailable.

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Issues: Whether the demand was barred by limitation and whether the extended period under section 11A could be invoked on the allegation of misdeclaration or suppression with intent to evade duty.

Analysis: The duty demand related to a period long before the show-cause notice. The respondents had been clearing goods under an approved classification list and the notification benefit had already been approved by the department. To invoke the extended period, the department was required to establish a positive act of suppression or misdeclaration with intent to evade duty. On the facts, all material facts were before the approving authority, and no such positive suppression was shown. The cited precedents involved different factual situations and did not assist the department.

Conclusion: The demand was barred by limitation and the extended period was not available to the department.

Final Conclusion: The appellate order upholding the drop of the show-cause notice was sustained and the departmental appeal failed.

Ratio Decidendi: The extended limitation period for excise duty can be invoked only on proof of suppression or misdeclaration with intent to evade duty; where the classification and exemption benefit were openly placed before the department and approved, the extended period is not available.

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