Statutory maximum price governs excise valuation, while extended limitation fails without suppression allegations.

Where molasses were sold in a market governed by a statutory ceiling price, the maximum price fixed by the State Government was the normal value for central excise assessment, even if actual sales were at a lower price, so the valuation issue was decided for the Revenue. However, the show cause notice did not allege suppression, misstatement, or similar conduct, so the extended limitation period could not be invoked; recovery was confined to the normal six-month period, and the time-bar issue was decided for the assessee.

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Issues: (i) Whether molasses sold below the maximum price fixed by the State Government had to be assessed to central excise duty on the maximum price fixed under law; (ii) Whether the demand raised by the show cause notice dated 1-4-97 for the earlier period was barred by limitation for want of suppression or misstatement.

Issue (i): Whether molasses sold below the maximum price fixed by the State Government had to be assessed to central excise duty on the maximum price fixed under law.

Analysis: Proviso (ii) to Section 4(1) of the Central Excise Act, 1944 deems the price fixed under a law, or the maximum price fixed under such law, to be the normal price for valuation. The State Government had fixed the maximum price of molasses under the Bihar Molasses (Control) Act, 1947, and the goods were sold in a market governed by that statutory ceiling. Actual sale at a lower price therefore did not alter the assessable value.

Conclusion: The duty was correctly assessable on the maximum price fixed under law, and this issue was decided against the assessee.

Issue (ii): Whether the demand raised by the show cause notice dated 1-4-97 for the earlier period was barred by limitation for want of suppression or misstatement.

Analysis: The show cause notice contained no or finding of suppression, misstatement, or similar conduct. In the absence of such allegations, invocation of the extended period was not justified, and the demand could survive only for the normal limitation period of six months preceding the notice.

Conclusion: The demand for the period beyond six months prior to the show cause notice was time-barred and this issue was decided in favour of the assessee.

Final Conclusion: The valuation dispute was resolved in favour of the Revenue, but the demand was curtailed to the normal limitation period in one case because the extended period was unavailable.

Ratio Decidendi: Where goods are sold in a market subject to a statutory maximum price, that maximum price is the normal price for valuation under central excise law; the extended period of limitation cannot be invoked without allegations or findings of suppression or misstatement.

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