Limitation for excise demand: full disclosure and no suppression barred use of the extended period.

The Supreme Court applied the limitation rule under the proviso to Section 11A(1) of the Central Excise Act, 1944 and found no basis to invoke the extended period because the assessee had disclosed its activity to the Department, claimed exemption for hand-made wooden furniture, and the record showed no misstatement, concealment, or misrepresentation. On that factual footing, the belated show cause notice was beyond time, and the duty demand was time-barred.

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Issues: Whether the show cause notice and duty demand were barred by limitation and whether the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944 could be invoked.

Analysis: The appellants had disclosed the nature of their activity to the Department by a declaration as early as 16.07.1987 and had taken the stand that hand-made wooden furniture was exempt under Notification No. 76/86-CE. The record disclosed no misstatement, concealment, or misrepresentation on their part. In these circumstances, the Department could not rely on the extended period of limitation, and the belated notice issued on 22.10.1996 was beyond time.

Conclusion: The demand was held to be time-barred and the extended period under the proviso to Section 11A(1) was inapplicable.

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