Extended limitation for suppression fails where verified classification lists already disclosed the material facts and the demand is time-barred.

The extended period of limitation under section 11A of the Central Excise Act could not be invoked where the assessee had filed classification lists declaring no proprietary interest in any other factory, and those declarations were verified and approved by central excise officers. Since the material fact relevant to clubbing was already within departmental knowledge, suppression of facts was not established. The alleged failure to disclose non-payment of job charges also did not support extended limitation in the absence of any legal duty to disclose such details for the relevant period. The duty demand was therefore barred by limitation, and the penalty failed with it.

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Issues: Whether the demand of duty and penalty could be sustained by invoking the extended period of limitation under section 11A of the Central Excise Act on the ground of suppression of facts, despite the assessees having filed and obtained approval of classification lists declaring that they had no proprietary interest in any other factory and the department having accepted those declarations after verification.

Analysis: The relevant classification lists filed in 1992, 1993 and 1994 contained a clear declaration that there was no proprietary interest in any other factory manufacturing excisable goods. Those declarations were verified by the Central Excise officers and approved by the jurisdictional authority. The material fact relevant to clubbing was therefore already within the department's knowledge. The alleged non-disclosure of non-payment of job charges was also insufficient, because no legal requirement to disclose such financial details for the relevant period was shown. On these facts, the foundation for alleging suppression and invoking the extended limitation period was not made out.

Conclusion: The extended period of limitation was not invocable. The duty demand was barred by limitation and was liable to be set aside, and the penalty fell with the demand.

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