Extended limitation for excise duty demands requires clear allegations of suppression; mere legal misinterpretation is insufficient.

The extended limitation period under the old Rule 10 applied only where short levy arose from fraud, collusion, wilful misstatement, or suppression of facts. A show cause notice must clearly allege and support those facts; here, it did not explain any deliberate concealment of duty collected in invoices or the circumstances constituting suppression. A mistaken interpretation of the assessable value provision was not enough by itself to trigger the longer limitation period. The demand raised beyond six months was therefore time-barred and set aside.

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Issues: Whether the demand of excise duty was barred by limitation for want of valid invocation of the extended period under Rule 10 on the ground of suppression of facts.

Analysis: The extended period under the old Rule 10 could be invoked only where the short levy resulted from fraud, collusion, wilful misstatement, or suppression of facts. The show cause notice did not set out facts showing that the assessee had deliberately concealed the duty element collected in invoices, nor did it narrate the circumstances constituting suppression. The dispute also proceeded on an interpretation of the assessable value provision, and a mistaken interpretation of law did not by itself justify the longer limitation period. In the absence of clear allegations and supporting facts of suppression in the notice, the notice could not sustain invocation of the extended time limit.

Conclusion: The demand raised beyond six months was time-barred and was set aside.

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