Extended excise limitation applies where misstatement or suppression is made to evade duty, despite departmental awareness of manufacture.

The extended five-year limitation under the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944 was held applicable where the assessee made a misstatement or suppressed material facts with intent to evade duty. The Court treated repeated claims that the product was exempt sagol as contrary to departmental findings that it was lime powder or calcium hydroxide, and noted the allegation that partnership records had been manipulated. It held that the department's prior awareness of manufacture or sampling did not by itself defeat the proviso. The demand was therefore not time-barred.

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Issues: Whether the extended period of five years under the proviso to Section 11A of the Central Excises and Salt Act, 1944 could be invoked on the footing that the petitioner had made a misstatement of facts and misdeclared the nature of the product so as to evade duty.

Analysis: The petitioner confined the challenge to limitation and did not press the classification dispute. On that footing, the product was treated as falling under Tariff Item No. 68 and not as sagol eligible for exemption. The record showed repeated assertions by the petitioner that the product was sagol and entitled to exemption under Notification No. 5/70, while the departmental material and the impugned order found that the product was lime powder or calcium hydroxide and that the partnership records had been manipulated. The Court held that the relevant requirement for the proviso was a misstatement or suppression by the assessee, and not the department's knowledge of the manufacture or prior sampling.

Conclusion: The proviso to Section 11A(1) was rightly invoked, and the demand was not barred by limitation.

Ratio Decidendi: For invoking the extended limitation period under the proviso to Section 11A(1), it is sufficient that the assessee made a misstatement or suppression with intent to evade duty; departmental awareness of the manufacture does not defeat the proviso.

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