Extended limitation requires proved suppression and intent to evade; a B-17 Bond alone cannot justify time-barred demand.

Extended limitation under Section 11A(1) of the Central Excise Act, 1944 could not be invoked against a 100% EOU because the clearances were already disclosed through CT-3 permissions, ER-2 returns and departmental audit. The demand was therefore based on facts within the department's knowledge, and the Revenue failed to establish suppression of facts or intent to evade duty. Execution of a B-17 Bond did not, by itself, dispense with the statutory preconditions for the longer period. Bona fide belief on exemption and prior judicial interpretation further supported the conclusion that the demand was time-barred.

---

---

Issues: Whether the demand raised against a 100% EOU for DTA clearances was barred by limitation, in the absence of suppression of facts or intent to evade duty.

Analysis: The clearance of raw materials and finished goods was disclosed to the department through CT-3 permissions, ER-2 returns and departmental audit. The demand was therefore founded on facts already within the knowledge of the department. The Court held that execution of a B-17 Bond did not dispense with the statutory requirement for invoking the extended period under Section 11A(1) of the Central Excise Act, 1944. The ingredients for the longer period were not established, and the demand could not be sustained merely on the basis of the bond. The Court also noted that the assessee acted under a bona fide belief on the exemption issue and that the dispute had been the subject of earlier judicial interpretation.

Conclusion: The extended period of limitation was not invokable, and the demand was time-barred.

Final Conclusion: The impugned order was set aside on limitation and the appeal succeeded, without examination of the merits of exemption eligibility.

Ratio Decidendi: For invoking the extended period under Section 11A(1) of the Central Excise Act, 1944, the Revenue must establish the statutory ingredients of suppression or other culpable conduct with intent to evade duty, and a B-17 Bond by itself does not override that requirement.

---