Extended limitation under excise law requires conscious suppression; recorded stock movements and bona fide belief defeated extended demand.

The extended period of limitation under the proviso to Section 11A(1) was held unavailable where the relevant movements of waste and scrap to job workers and the return of ingots were fully recorded in the books and supported by delivery challans. As the scrap arose in manufacture, was not sold, and the assessee claimed a bona fide belief of exemption and revenue neutrality through MODVAT credit, the material needed to show conscious or deliberate suppression, fraud, collusion or wilful misstatement was absent. Mere inaction or failure was insufficient, so the demand was confined to the normal six-month period.

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Issues: Whether the extended period of limitation under the proviso to Section 11A(1) could be invoked on the basis of alleged fraud, collusion, wilful misstatement or suppression of facts.

Analysis: The movement of waste and scrap to job workers and the return of ingots was fully recorded in the regular books of account and supported by delivery challans. The scrap arose in the course of manufacture, there was no sale of scrap, and the appellant asserted a bona fide belief that the scrap was exempt from duty and in any event the duty position was revenue neutral because MODVAT credit was available. In these circumstances, the material necessary to establish conscious or deliberate withholding of information was absent, and mere inaction or failure was insufficient to attract the extended limitation period.

Conclusion: The extended period under the proviso to Section 11A(1) was not invocable; the demand was confined to the normal period of six months.

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