Extended limitation for excise demand fails absent deliberate suppression; disclosed facts barred the Department from invoking the proviso.

The writ petition was not rejected for alternate remedy because it had already been admitted and had remained pending for a long time, so relegation to appeal would only prolong the dispute. On limitation, the Department could not invoke the extended period for duty on captively consumed Benzyl Cyanide because the relevant manufacturing and clearance facts were already disclosed through classification lists, correspondence, and gate passes. A repeated show cause notice, without new material, did not establish deliberate suppression or wilful misstatement, and a mere incorrect notification reference was insufficient to show intent to evade duty. The demand and penalty for the extended period were therefore set aside.

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Issues: (i) whether the writ petition should be rejected on the ground of availability of an alternate statutory appeal; (ii) whether the Department was entitled to invoke the extended period of limitation for the demand raised on the captively consumed Benzyl Cyanide.

Issue (i): whether the writ petition should be rejected on the ground of availability of an alternate statutory appeal

Analysis: The petition had already been admitted after consideration of maintainability, and the dispute had remained pending for a long period. In these circumstances, relegating the petitioner to the appellate remedy would only prolong an already old controversy and would serve no useful purpose.

Conclusion: The preliminary objection based on alternate remedy was rejected.

Issue (ii): whether the Department was entitled to invoke the extended period of limitation for the demand raised on the captively consumed Benzyl Cyanide

Analysis: The material on record showed that the Department was aware that the petitioner was manufacturing Phenyl Acetic Acid, that it was being cleared on nil duty under the exemption notification, and that Benzyl Cyanide was being used captively in that process. The classification lists, correspondence regarding reversal of MODVAT credit, and gate passes supported disclosure of the relevant facts. The later show cause notice substantially repeated the earlier notice and did not disclose any new material justifying an allegation of deliberate suppression or wilful misstatement. Mere mention of an incorrect notification number was not enough to attract the extended period, which required a conscious act intended to evade duty.

Conclusion: The conditions for invoking the extended period were not satisfied, and the demand for the extended period was barred by limitation.

Final Conclusion: The demand and penalty relating to the extended period were set aside, and the writ petition succeeded on limitation, while the other writ petition was not pressed.

Ratio Decidendi: The extended limitation under the proviso to Section 11A(1) can be invoked only on proof of deliberate suppression, wilful misstatement, fraud, collusion, or similar conduct intended to evade duty, and not where the relevant facts were already known to the Department.

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