Extended limitation cannot be invoked when the department already knew the material facts behind the Cenvat credit demand.

Where the department was already aware of the material facts from an earlier investigation and notice against the supplier, a later show cause notice to deny Cenvat credit and demand duty could not validly invoke the extended period of limitation. The notice was issued beyond time on facts already known to the department, so the extended limitation was not sustainable. The show cause notice was therefore barred by limitation and not maintainable under central excise law.

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Issues: Whether the show cause notice issued to deny cenvat credit and demand duty was barred by limitation.

Analysis: The demand arose from an investigation already conducted against the supplier, and an earlier notice had been issued on that basis. The record showed that the department was aware of the relevant facts in the earlier proceedings, yet the later notice to the appellant was issued beyond time by invoking the extended period. In these circumstances, the extended period could not be sustained for the appellant's case.

Conclusion: The show cause notice was barred by limitation and was not sustainable.

Ratio Decidendi: Where the department was already aware of the material facts forming the basis of the demand, a subsequent notice cannot be validly issued by invoking the extended period of limitation under the central excise law.

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