Extended limitation under excise law failed where departmental knowledge negated suppression of facts.

The extended limitation period under the Central Excise Act applies only where non-levy, short levy, or erroneous refund results from fraud, collusion, wilful misstatement, suppression of facts, or similar contravention. Where the registration certificate and departmental correspondence showed that the relevant facts, including the technical collaboration and brand use, were already within the Department's knowledge, suppression could not be established. As the first appellate authority had found no suppression and that finding was not disturbed, the Department could not invoke the five-year period. The show cause notice was therefore time-barred and the limitation issue fell in favour of the assessee.

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Issues: Whether the show cause notice was barred by limitation and whether the extended period could be invoked on the allegation of suppression of facts with intent to evade duty.

Analysis: Section 11A of the Central Excise Act, 1944 provides different limitation periods, with the extended five-year period available only where non-levy, short levy, or erroneous refund is attributable to fraud, collusion, wilful misstatement, suppression of facts, or contravention of the Act or Rules. The registration certificate and the departmental correspondence showed that the relevant facts, including the technical collaboration and use of the brand name, were already within the Department's knowledge. The first appellate authority had specifically found that there was no suppression, and that finding was not interfered with by the Tribunal. Since the Department's invocation of the extended limitation rested only on suppression, the longer period could not be sustained.

Conclusion: The show cause notice was held to be time-barred and the limitation issue was decided in favour of the assessee.

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