Extended limitation in rebate recovery needs specific allegations; a bare claim of erroneous grant cannot sustain time-bar

Extended limitation for recovery of excess rebate requires a show cause notice to specifically allege fraud, collusion, wilful misstatement, suppression of facts, or mala fide contravention. A notice issued only on the footing that rebate was erroneously granted, without pleading any statutory ground for extension, does not adequately inform the assessee of the case to meet and cannot sustain invocation of the extended period. On that principle, the demand is treated as time-barred and the extended limitation period is unavailable where the requisite allegations are absent.

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Issues: Whether the demand for recovery of excess rebate was barred by limitation because the show cause notice invoked the extended period without alleging fraud, collusion, wilful misstatement, suppression of facts, or mala fide contravention.

Analysis: The notice was issued beyond the normal period and proceeded only on the basis that rebate had been erroneously granted. It did not specify any allegation falling within the ingredients required to sustain invocation of the extended limitation period. The governing principle is that, where the department seeks to extend limitation, the notice must clearly inform the assessee of the precise allegation so that the case can be met effectively. In the absence of such allegations, the extended period cannot be invoked.

Conclusion: The demand was time-barred and the extended period of limitation was not available to the department.

Final Conclusion: The impugned demand and order were set aside, and the appeal was allowed with consequential relief.

Ratio Decidendi: A show cause notice cannot sustain invocation of the extended period of limitation unless it specifically alleges the statutory grounds that justify such extension.

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