Wilful suppression and extended excise limitation apply only when deliberate concealment to evade duty is proved.

Extended limitation under the proviso to Section 11A of the Central Excises and Salt Act, 1944 applies only on proof of fraud, collusion, wilful mis-statement, suppression of facts, or contravention with intent to evade duty. Those expressions are construed strictly, and deliberate concealment must be established; mere non-acceptance of classification is insufficient. Where the product was disclosed from the outset, samples were repeatedly drawn, and the Department had already examined the classification through its own tests and market enquiries, departmental knowledge negatives wilful suppression or misrepresentation. On that basis, the proviso was inapplicable and recovery could proceed only within the normal limitation period.

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Issues: Whether the proviso to Section 11A of the Central Excises and Salt Act, 1944 could be invoked to sustain the demand for the extended period of limitation on the ground of wilful mis-statement or suppression of facts with intent to evade duty.

Analysis: The governing principle under the proviso to Section 11A is that the extended period is available only where the Department establishes fraud, collusion, wilful mis-statement, suppression of facts, or contravention with intent to evade duty. The expressions in the proviso are to be construed strictly, and suppression or mis-statement must be deliberate and wilful. On the facts, the product had been declared from the inception as sagol cement, samples had repeatedly been drawn, and the Department had earlier accepted the classification on the basis of its own tests and market enquiries. The Department's full knowledge of the relevant facts negatived any deliberate concealment or misrepresentation by the assessee.

Conclusion: The proviso to Section 11A of the Central Excises and Salt Act, 1944 was not attracted, and the demand could not be sustained for the extended period of five years.

Final Conclusion: The impugned proceedings were quashed to the extent they proceeded beyond the normal limitation period, and the Department was left free to recompute liability only within the six-month period prescribed by the main provision.

Ratio Decidendi: The extended limitation under the excise recovery proviso can be invoked only on proof of wilful suppression or wilful mis-statement with intent to evade duty, and it is unavailable where the Department already knew the material facts.

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