Extended limitation for excise penalty requires proved suppression; prior departmental knowledge defeated the five-year proviso.

Wilful misstatement or suppression of facts was not established where the department already knew the unit's ownership, manufacture details, exemption claim and declarations. Mere non-payment of duty after a later notification did not, without more, attract the extended five-year limitation under Section 11A of the Central Excises and Salt Act, 1944. On the recorded facts, the proviso extending limitation was not applicable, so penalty could not be sustained beyond the normal six-month period and was liable to be quashed.

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Issues: Whether penalty could be sustained beyond the normal limitation period under Section 11A of the Central Excises and Salt Act, 1944 on the basis of alleged wilful misstatement or suppression of facts, when the levy of duty itself was not in dispute.

Analysis: The material on record showed that the department was aware that the petitioner unit was owned by the company and that the relevant facts regarding manufacture, exemption claim, and declarations had been placed before the department. The mere non-payment of duty after the later notification did not, by itself, establish wilful misstatement or suppression of facts. The finding that the petitioner had cleared goods without revealing true facts was not supported by the record, and the proviso extending limitation to five years was not attracted.

Conclusion: Penalty was not exigible beyond the normal period of six months and was liable to be quashed.

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