Extended limitation in central excise cannot apply to a mere valuation error without suppression or intent to evade.

The extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act could not be invoked where the assessee had filed statutory declarations and RT-42 returns, used the correct valuation provision, and the dispute arose only from an arithmetical error in raw material cost. Because the clearances were consumed within the assessee's own units and any duty paid would be available as Modvat credit, the matter was revenue neutral. In the absence of suppression of facts or intent to evade duty, the differential duty demand based on the valuation mistake was unsustainable.

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Issues: Whether the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 could be invoked for demanding differential duty arising from an error in cost construction valuation.

Analysis: The assessee had filed the statutory declaration and RT-42 returns during the relevant period and had invoked the correct valuation provision. The dispute arose from an arithmetical mistake in computing raw material cost, not from any concealment or deliberate understatement. The goods cleared by one unit were consumed by other units of the same assessee, so any duty paid would be available as Modvat credit, indicating revenue neutrality. In these circumstances, suppression of facts and intent to evade duty were not established, and the extended limitation period was not available.

Conclusion: The extended period of limitation was not invokable, and the duty demand was unsustainable.

Ratio Decidendi: Where the assessee has made the relevant disclosures, the dispute is only over an arithmetical valuation error, and the situation is revenue neutral, the extended period of limitation cannot be invoked in the absence of suppression or intent to evade duty.

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