Extended limitation cannot rest on retrospective sampling when prior verification showed no suppression; demand, penalty and interest fail.

Where a show cause notice is issued beyond the normal limitation period, the extended period cannot be invoked unless misdeclaration or suppression is established on the facts. A declaration under Rule 173B had already been verified by the department, samples were drawn earlier, and RT 12 returns were assessed without objection; a later test report from fresh samples could not be used retrospectively to justify an earlier demand. On that basis, the ingredients for the proviso to Section 11A(1) were not made out, and the duty demand was time-barred. The consequential penalty and interest also could not survive.

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Issues: Whether the duty demand, penalty and interest could be sustained when the show cause notice was issued beyond the normal period and the extended period of limitation was invoked on the basis of alleged misdeclaration and suppression.

Analysis: The declaration filed under Rule 173B had been subjected to departmental verification, samples had been drawn earlier, and the RT 12 returns were assessed without any adverse finding. A later test report based on fresh samples could not be applied retrospectively to support the demand for an earlier period. In these circumstances, the ingredients necessary to invoke the larger period under the proviso to Section 11A(1) were not established, and the demand was time-barred.

Conclusion: The duty demand was barred by limitation and could not be sustained. The consequential penalty and interest also failed.

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