Extended excise duty limitation turns on proof of suppression, while a substituted notice limits recovery to the lawful period.

Extended limitation under the proviso to Section 11A of the Central Excises and Salt Act, 1944 was treated as available only where fraud or suppression with intent to evade duty was shown. On the facts discussed, the appellant's purchase and shifting of powerlooms on the belief that the textile permit was genuine, together with prior permission from excise authorities to shift without objection, negatived conscious suppression. The substituted show cause notice dated 9-5-1980 was treated as the operative notice, so recovery was confined to the lawful six-month period preceding it. The commentary states that the larger demand could not survive beyond that period.

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Issues: Whether the extended period of limitation under the proviso to Section 11A of the Central Excises and Salt Act, 1944 could be invoked for recovery of duty, and whether the demand could survive when the effective show cause notice was the later substituted notice.

Analysis: The appellant was found to have purchased and shifted the powerlooms on the belief that the textile permit was genuine, and the excise authorities themselves had earlier permitted shifting without objection, which negatived any inference of conscious fraud or suppression with intent to evade duty. In those circumstances, the case did not justify resort to the extended limitation period. The later show cause notice dated 9-5-1980 replaced the earlier notice and became the operative notice, so duty could be demanded only for the six months preceding that notice. Since the demand covered a much longer period, the entire demand fell outside the permissible period.

Conclusion: The extended period of limitation was not applicable, and no duty was recoverable under the substituted notice.

Final Conclusion: The duty demand and the orders of the lower authorities were set aside, and the appeal succeeded on limitation.

Ratio Decidendi: A demand for past excise duty can be sustained beyond the normal limitation period only on proof of fraud or suppression with intent to evade duty, and where the operative notice is a substituted notice, recovery is confined to the lawful period computed from that notice.

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