Extended limitation in excise requires proof of suppression and intent to evade, not a mere change in valuation view.

In valuation disputes involving goods transferred to a captive unit, the extended period of limitation cannot be invoked unless the Revenue proves suppression of material facts or similar culpable conduct with intent to evade duty. A demand based only on a later change in cost data or a revised departmental view does not establish the foundational elements needed for the proviso to the limitation provision. On the stated facts, no mala fide conduct or contumacious behaviour was shown, so the show cause notice was held not maintainable and the extended limitation period was unavailable to the Revenue.

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Issues: Whether the show cause notice was maintainable and whether the extended period of limitation could be invoked on the facts of the case.

Analysis: The appeal concerned valuation of goods transferred to the assessee's own unit for captive consumption under the valuation framework applicable to such clearances. Although the department proceeded on a later revision of cost data, the record showed that the demand was founded only on a change of opinion. The Court found no material indicating mala fide conduct, contumacious behaviour, or suppression of material facts with intent to evade duty. In the absence of such foundational facts, invocation of the proviso to the limitation provision was not justified.

Conclusion: The show cause notice was held not maintainable and the extended period of limitation was not available to the Revenue.

Ratio Decidendi: The extended period of limitation under the central excise law can be invoked only on proof of suppression or similar culpable conduct with intent to evade duty, and not merely because the Revenue later changes its view on valuation.

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