Extended limitation under excise law cannot be quashed at threshold where suppression and evasion need factual investigation.

Extended limitation under the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944 may be invoked only where the material indicates fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. On the facts alleged, including private records, inter-unit transfers, and non-accountal of clinker and cement, the Court held that whether the transfers were within the knowledge or consent of excise authorities required factual investigation by the departmental authority. The show cause notice was therefore not quashed at the threshold, and the writ petition was not maintainable at that stage.

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Issues: Whether the show cause notice invoking the extended period of limitation under the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944 was liable to be quashed at the threshold on the ground that no case of fraud, collusion, willful misstatement, suppression of facts, or contravention with intent to evade duty was made out.

Analysis: The notice alleged removal and non-accountal of clinker and cement between separate excise units, suppression in statutory records, and evasion of duty. The Court held that the existence of private records, inter-unit transfers, and the question whether the transfers were with knowledge or consent of the excise authorities were matters requiring investigation on the facts. It applied the settled principle that the extended period under the proviso to Section 11A can be invoked only where the material suggests fraud, collusion, willful misstatement, suppression of facts, or contravention with intent to evade duty, and that whether such ingredients exist is ordinarily a question of fact to be examined by the departmental authority.

Conclusion: The writ petition was not maintainable at that stage and the show cause notice was not quashed.

Ratio Decidendi: A show cause notice invoking the extended limitation under the proviso to Section 11A of the Central Excises and Salt Act, 1944 cannot be quashed at the threshold where the materials disclose a prima facie case requiring factual investigation into suppression or evasion, because the existence of the statutory ingredients is a question of fact.

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