Extended limitation under central excise not available absent suppression, with later non-levy recognition supporting the assessee.

Extended limitation under central excise law could not be invoked for clearances of LDPE films where there was no fraud, collusion, wilful misstatement or suppression of facts. The Tribunal treated the later Section 11C exemption for a subsequent period as strong evidence that the Government recognised a general practice of non-levy for such goods, and followed an earlier identical decision. On that basis, the later adverse interpretation of the notification on merits did not justify alleging suppression. The demand was unsustainable, and the duty demand and penalty were set aside with consequential relief.

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Issues: Whether the extended period of limitation under the central excise law could be invoked for the demand relating to clearance of LDPE films, in the light of the later exemption under Section 11C and the absence of fraud, wilful misstatement or suppression of facts.

Analysis: The demand related to clearances made before the amended notification took effect, and the later issuance of a Section 11C exemption for a subsequent period was treated as significant evidence that the Government itself recognised a general practice of non-levy in respect of such films. In these circumstances, the Tribunal followed the earlier decision on identical facts and held that the assessee's clearances could not be characterised as having been made by fraud, collusion, wilful misstatement or suppression of facts merely because the interpretation of the notification was later settled adversely on merits.

Conclusion: The extended period of limitation was not invocable, and the demand confirmed in the impugned order could not be sustained.

Final Conclusion: The appeal succeeded and the duty demand and penalty were set aside with consequential relief.

Ratio Decidendi: Where the Government itself later recognises a general practice of non-levy for the relevant goods, the extended period cannot be invoked in the absence of fraud, wilful misstatement, collusion or suppression of facts.

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