Extended limitation under excise law requires wilful suppression or intent to evade; mere misdeclaration is insufficient.

Extended limitation under central excise law can be invoked only on proof of fraud, collusion, wilful misstatement, suppression of facts, or other conduct intended to evade duty. Where goods were cleared on the basis of a declaration and a naval certificate claiming exemption, and no wilful intent was established, mere misdeclaration was insufficient to justify the extended period. On those facts, the notice was time-barred and the demand, interest, and penalty could not be sustained.

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Issues: Whether the extended period of limitation under Section 11A of the Central Excise Act, 1944 was invocable on the facts, and whether the show-cause notice was barred by limitation.

Analysis: The goods were cleared on the basis of a declaration and a certificate issued by the Indian Navy stating that the supplies were for use on board naval vessels and eligible for exemption under Notification No. 64/95-CE dated 16.3.1995. The declaration was filed under Rule 173B of the Central Excise Rules, 1944. On these facts, the element required for invoking the extended period, namely fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty, was not established. Mere misdeclaration, without wilful intent, was insufficient to attract the extended limitation period.

Conclusion: The extended period of limitation was not invocable, the show-cause notice was time-barred, and the demand, interest, and penalty could not be sustained.

Ratio Decidendi: The extended limitation under Section 11A of the Central Excise Act, 1944 can be invoked only upon proof of wilful suppression, misstatement, fraud, collusion, or similar conduct with intent to evade duty; absence of such intent makes the demand time-barred.

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