Extended limitation and excise penalty fail absent suppression or intent to evade, and Section 11AC cannot apply retrospectively.

Extended limitation and penalty were held unsustainable where the record showed no suppression, fraud, collusion, misstatement, or intention to evade duty, and the manufacturing activity involved only a change in the form of woollen yarn without any requirement of intimation under the then prevailing rules. The Tribunal also noted that the relevant demand period preceded the introduction of Section 11AC of the Central Excise Act, 1944, so penalty under that provision could not be imposed for that period. The petition was dismissed.

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Issues: Whether the extended period of limitation and penalty were sustainable in the absence of suppression, fraud, collusion, or intention to evade duty, and whether penalty under Section 11AC of the Central Excise Act, 1944 could be imposed for a period prior to its enactment.

Analysis: The finding recorded was that the assessee had been manufacturing woollen hosiery over a period of time and the material issue involved a change in the form of woollen yarn, with no requirement of intimation under the then prevailing rules. The Tribunal found no suppression or misstatement, no evidence of fraud or collusion, and no material indicating intention to evade payment of duty. It also held that the demand period preceded the introduction of Section 11AC of the Central Excise Act, 1944.

Conclusion: The extended limitation and penalty were not sustainable, and penalty under Section 11AC was not imposable. The petition was dismissed.

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