Extended limitation under Section 11A applies to alleged clandestine removal when Rule 9(2) is read with the excise law.

In alleged clandestine removal of excisable goods, Rule 9(2) was read with Section 11A of the Central Excises and Salt Act, 1944, so the Department could invoke the proviso and use the extended period of limitation where suppression was alleged. The contention that Section 11A operated only prospectively and therefore could not support the notice was rejected as unsustainable. The challenge to the show cause notice on want of jurisdiction consequently failed, and the extended limitation period was held applicable.

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Issues: Whether the proviso to Section 11A of the Central Excises and Salt Act, 1944, permitting invocation of the extended period of limitation in cases of suppression, could be applied to alleged clandestine removals under Rule 9(2) of the Central Excise Rules, and whether the show cause notice was without jurisdiction on the ground that Section 11A operated only prospectively.

Analysis: The proceeding arose from an allegation of clandestine removal of excisable goods without payment of duty. The Tribunal held that Rule 9(2) had to be read with Section 11A of the Central Excises and Salt Act, 1944, and that in such a case the Department was entitled to invoke the proviso to Section 11A and issue a show cause notice within the extended limitation period. The contention that Section 11A could operate only prospectively was rejected as unsustainable.

Conclusion: The challenge to the show cause notice and to the applicability of the extended period of limitation failed, and the issue was decided against the assessee.

Final Conclusion: The appeal was dismissed, while leaving the assessee free to raise all other available defences before the adjudicating authority.

Ratio Decidendi: In cases of alleged clandestine removal, Rule 9(2) may be read with Section 11A of the Central Excises and Salt Act, 1944, so that the Department can validly invoke the extended limitation period under the proviso to Section 11A.

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