Extended limitation under Central Excise law requires wilful suppression with intent to evade duty; mere negligence is insufficient.

The extended limitation period under Section 11A(1) of the Central Excise Act applies only where non-payment is accompanied by wilful misstatement or suppression of facts with intent to evade duty. Mere failure, negligence, or a bona fide mistaken belief is insufficient to trigger the longer period. On the facts stated, the record did not show deliberate withholding of information or any intent to evade duty, and the suppression finding lacked supporting material. The demand was therefore held to be time-barred and the assessee succeeded.

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Issues: Whether the demand raised in the show cause notice was barred by limitation and whether the extended period under Section 11A(1) of the Central Excise Act, 1944 could be invoked in the absence of material showing wilful suppression of facts with intent to evade duty.

Analysis: The extended period under Section 11A(1) is attracted only when non-payment is accompanied by wilful misstatement or suppression of facts with intent to evade duty. Mere failure, negligence, or a bona fide mistaken belief does not by itself justify invocation of the longer limitation period. The record did not contain material showing that the appellant deliberately withheld information or acted with an intention to evade duty. The finding of suppression was based on no supporting material sufficient to sustain the invocation of the proviso.

Conclusion: The invocation of the extended period of limitation was unjustified and the demand was held to be time-barred, in favour of the assessee.

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