Extended limitation in excise recovery needs specific suppression allegation; a mere information letter cannot replace a show cause notice.

In excise recovery proceedings, the extended limitation period could not be invoked without a specific allegation of wilful suppression or mis-declaration; in its absence, the ordinary six-month period applied, so the demand beyond six months before 17-2-1978 was time-barred. A Superintendent's letter seeking particulars of clearances was not a valid statutory show cause notice because it did not quantify the demand or enable an effective reply, and therefore it could not save limitation. The demand was consequently restricted to the period not barred by time, with relief for the time-barred portion.

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Issues: (i) Whether the demand of differential excise duty was barred by limitation in the absence of any allegation of wilful suppression or mis-declaration. (ii) Whether the Superintendent's letter dated 26-11-1977 could be treated as a valid show cause notice so as to save the demand from the bar of limitation.

Issue (i): Whether the demand of differential excise duty was barred by limitation in the absence of any allegation of wilful suppression or mis-declaration.

Analysis: The demand was issued under Rule 10 of the Central Excise Rules, 1944. The notice dated 17-2-1978 did not allege wilful suppression or mis-declaration. In such a situation, the ordinary limitation of six months applied. The attempt to invoke the extended period could not succeed merely on the basis that the exemption notification had not been complied with. The absence of the necessary allegation in the notice was decisive.

Conclusion: The demand beyond six months immediately preceding 17-2-1978 was barred by time and the extended period was not available against the assessee.

Issue (ii): Whether the Superintendent's letter dated 26-11-1977 could be treated as a valid show cause notice so as to save the demand from the bar of limitation.

Analysis: The letter only called for particulars of clearances and referred to the later notification. It did not specify the quantum of duty, did not quantify the alleged short levy, and did not afford the assessee a proper opportunity to show cause against a stated demand. A communication seeking information is not equivalent to a statutory show cause notice. The notice contemplated by law must disclose the demand and enable an effective response.

Conclusion: The Superintendent's letter was not a valid show cause notice and could not extend or save the limitation period.

Final Conclusion: The appellate challenge succeeded to the extent that the duty demand was restricted by limitation, and consequential relief followed for the time-barred portion of the demand.

Ratio Decidendi: In excise recovery proceedings, the extended limitation period cannot be invoked without a specific allegation of wilful suppression or mis-declaration, and a mere letter seeking information cannot be substituted for a statutory show cause notice.

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