Non-disclosure alone does not trigger extended limitation or penalty without deliberate suppression and intent to evade duty.

Non-disclosure of waste and scrap clearances in returns did not, on these facts, amount to deliberate suppression or intent to evade duty because the record showed uncertainty on excisability and the assessee had issued debit notes. The extended period of limitation under the Central Excise Act was therefore not invocable, making the show cause notice time-barred. For the same reason, penalty under Section 11AC was also unsustainable because it requires a foundational finding of conscious and deliberate wrongdoing leading to evasion.

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Issues: (i) Whether the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944 could be invoked on the basis of non-disclosure of clearance of waste and scrap in the returns. (ii) Whether penalty under Section 11AC of the Central Excise Act, 1944 was leviable as mandatory in the facts of the case.

Issue (i): Whether the extended period of limitation under Section 11A(1) of the Central Excise Act, 1944 could be invoked on the basis of non-disclosure of clearance of waste and scrap in the returns.

Analysis: The proviso to Section 11A(1) applies only where non-payment or short payment of duty is attributable to fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. The surrounding record showed uncertainty in law as to the excisability of the waste and scrap, and the assessee had raised debit notes for clearances. On those facts, mere failure to make declarations in the returns did not amount to deliberate suppression or an intention to evade duty.

Conclusion: The extended period of limitation was not invocable, and the show cause notice was time-barred.

Issue (ii): Whether penalty under Section 11AC of the Central Excise Act, 1944 was leviable as mandatory in the facts of the case.

Analysis: Penalty under Section 11AC follows only when there is a finding of conscious and deliberate wrongdoing leading to evasion of duty. Since such a foundational finding was absent, and the basis for penalty was only non-disclosure of the clearances, the conditions for imposition of penalty were not satisfied.

Conclusion: Penalty under Section 11AC was not sustainable on the facts found.

Final Conclusion: The assessee succeeded on the limitation issue, the revenue's appeal failed, and the tribunal's order was set aside.

Ratio Decidendi: Non-disclosure by itself does not justify the extended limitation period or penalty unless there is deliberate suppression of material facts with intent to evade duty.

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