Excise duty limitation and absence of suppression barred a differential duty demand despite retrospective amendment.

A show cause notice seeking differential excise duty for April and May 1980 was held time-barred because it was issued after the normal limitation period under Section 11A. The assessee's non-disclosure in returns did not amount to suppression or wilful misstatement, as the Department was already aware from earlier litigation of the differential duty collection issue and the position after the Delhi High Court decision in March 1980. The retrospective amendment to Section 4(4)(d)(ii) by the Finance Act, 1982 did not override the limitation scheme under Section 11A, so the demand could not be sustained.

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Issues: Whether the show cause notice demanding differential duty for April and May 1980 was barred by limitation and whether the extended period could be invoked on the facts disclosed.

Analysis: The demand related to removals in April and May 1980, while the notice was issued on 16-6-1982. The assessee had not disclosed in its returns that duty had been collected from buyers at 30% while duty was paid at 15%. However, the Department was already aware from earlier litigation that such differential collection had been in issue, and after the Delhi High Court decision in March 1980 the assessee could not be said to have suppressed facts or made a wilful misstatement in the relevant period. In the absence of suppression or wilful misstatement, the demand could survive only if raised within the normal period. The retrospective amendment to Section 4(4)(d)(ii) by the Finance Act, 1982 did not displace the limitation prescribed under Section 11A of the Central Excises and Salt Act, 1944.

Conclusion: The show cause notice was time-barred and the demand could not be sustained.

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