False declaration for excise exemption justified extended limitation and sustained demand and penalty.

False declaration made to obtain excise exemption was treated as misstatement and suppression of facts because the goods cleared were found not to be the exempt pharmacopia items claimed in the declaration. On that basis, the extended period of limitation under the proviso to Section 11A of the Central Excise Act was available to the Revenue for recovery. Authorities cited on different factual matrices were held inapplicable. The demand and penalty were upheld.

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Issues: Whether the demand and penalty were validly sustained by invoking the extended period of limitation under the proviso to Section 11A of the Central Excise Act on the ground of misstatement and suppression of facts while obtaining exemption.

Analysis: The declaration made for exemption stated that the goods were pharmacopia items, but the finding recorded by the authorities was that the goods manufactured and cleared were not so exempted. The Court held that this amounted to a false declaration and a clear misstatement of fact, resulting in suppression of the true nature of the goods. In such circumstances, the Revenue was entitled to invoke the proviso to Section 11A and proceed for recovery within the extended period of limitation. The reliance placed on authorities dealing with different factual situations was found to be inapplicable.

Conclusion: The invocation of the extended period of limitation was justified, and the demand and penalty were upheld.

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