Extended limitation under Central Excise law fails without fraud, wilful misstatement, or suppression of facts.

The extended limitation period under the proviso to Section 11A of the Central Excise Act, 1944 could not be invoked because the record did not show fraud, wilful misstatement, or suppression of facts by the assessee. The show cause notice was issued long after the departmental inspection had already disclosed the alleged discrepancy, and the stock-register error was treated as an admitted mistake in maintenance of records. On those facts, the duty demand was time-barred and could not be sustained on limitation, with the assessee succeeding and the High Court's decision affirmed.

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Issues: Whether the show cause notice and duty demand were barred by limitation and whether the proviso to Section 11A of the Central Excise Act, 1944 could be invoked.

Analysis: The notice was issued long after the departmental inspection had disclosed the alleged discrepancy. The record did not establish fraud, wilful misstatement, or suppression of facts by the assessee. The discrepancy in stock records was accepted as an admitted mistake in maintenance of registers, and the facts did not justify invocation of the extended period under the proviso to Section 11A.

Conclusion: The demand was time-barred and the proviso to Section 11A of the Central Excise Act, 1944 was not applicable; the finding was in favour of the assessee.

Final Conclusion: The appeal failed because the impugned demand could not be sustained on limitation, and the High Court's decision was affirmed.

Ratio Decidendi: In the absence of fraud, wilful misstatement, or suppression of facts, the extended period for issuing a show cause notice under Section 11A cannot be invoked.

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