Extended limitation under section 11A fails without specific allegations and proof of suppression or intent to evade duty.

Extended limitation under section 11A was unavailable because the show cause notice lacked specific averments of fraud, collusion, wilful misstatement, suppression of facts, or other conduct showing intent to evade duty. The Court accepted that the dispute over classification of food colour preparations had caused industry-wide confusion and that the assessee acted under a bona fide belief. In the absence of clear allegations and supporting proof of culpable intent, the Department could not invoke the longer limitation period, and the demand was held time-barred.

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Issues: Whether the demand was sustainable under the extended period of limitation in the absence of specific allegations of suppression, fraud or mala fide intention in the show cause notice.

Analysis: The dispute arose out of non-registration and non-payment of duty for the relevant period. The Court noted that invocation of the extended period under section 11A required ingredients such as fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade duty. On the facts, the show cause notice did not contain specific and express averments of mala fides or deliberate suppression. The assessee's stand was that there was industry-wide confusion regarding classification of food colour preparations, and that it acted under a bona fide belief until the controversy was settled. The Court accepted the Tribunal's view that, without clear allegations and proof of intent to evade, the longer limitation could not be invoked.

Conclusion: The demand was time-barred and the extended period of limitation was not available to the Department.

Ratio Decidendi: The extended limitation under section 11A cannot be invoked unless the show cause notice and evidence establish suppression or other culpable conduct with intent to evade duty.

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