Wilful suppression and intent to evade duty are required to invoke the extended limitation for excise credit recovery.

Extended limitation for recovery of wrongly availed credit under Rule 57-I applies only where the credit was taken by wilful misstatement, collusion or suppression of facts with intent to evade duty. The same interpretative standard applied to the proviso to Section 11A was treated as governing Rule 57-I, so mere suppression without deliberate evasion is insufficient. On the facts, the credit was otherwise admissible and the lapse was procedural, with no evidence of intentional wrongful availment. The extended period was therefore not available and the demand was time barred.

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Issues: Whether the extended period of limitation under Rule 57-I of the Central Excise Rules, 1944 could be invoked for mere suppression of facts, or whether such suppression had to be wilful and with intent to evade payment of duty.

Analysis: Rule 57-I provides a normal limitation of six months for recovery of wrongly availed credit, but the period extends to five years where the credit has been taken by reason of wilful misstatement, collusion or suppression of facts. The wording is materially similar to the proviso to Section 11A of the Central Excise Act, 1944. The same interpretative principle applied by the Supreme Court to Section 11A was treated as applicable to Rule 57-I, namely that suppression of facts must be wilful and must carry an intent to evade duty. The record also showed that the credit was otherwise admissible and the lapse was procedural, with no evidence of deliberate availing of ineligible credit.

Conclusion: The extended period of limitation was not invokable and the demand was time barred.

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