Extended limitation for excise demand fails without pleaded suppression or wilful misstatement in the notice

Extended limitation for central excise demand was unavailable where the show cause notice alleged only short levy from incorrect set-off and did not expressly plead fraud, collusion, wilful misstatement, suppression of facts, or misdeclaration. The notice also failed to set out supporting facts from which deliberate conduct could be inferred. As the relevant declarations and factory particulars had been filed and the department was aware of the manufacturing arrangement, the necessary ingredients for invoking the extended period were absent. The duty demand beyond six months was therefore barred, and the issue was decided in favour of the assessee.

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Issues: Whether the demand of central excise duty could be sustained beyond six months by invoking the extended period under the limitation provision in the absence of an express allegation of fraud, collusion, wilful misstatement, suppression of facts, or misdeclaration in the show cause notice.

Analysis: The notice merely alleged short levy arising from incorrect availment of set-off under the notification. It did not expressly charge fraud, collusion, suppression of facts, wilful misstatement, or similar deliberate conduct, nor did it set out facts from which such intention could be inferred. The record also showed that the relevant declarations and factory particulars had been filed and that the department was aware of the manufacturing arrangement. In this setting, the extended limitation could be invoked only if the necessary ingredients were pleaded and supported by material, which was absent here.

Conclusion: The extended period of limitation was not available to the department, and the duty demand beyond six months was barred. The issue was decided in favour of the assessee.

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