Extended limitation under Section 11A(1) needs specific allegations of intent to evade duty; vague averments cannot sustain demand or penalties.

Invocation of the extended limitation period under the proviso to Section 11A(1) requires a specific allegation of fraud, collusion, wilful misstatement, suppression of facts, or contravention of law with intent to evade duty. A mere reference to clandestine manufacture, clearance, or alleged evasion is insufficient if the notice does not plead those essential ingredients expressly. On the facts noted, the notice lacked such averments, so the duty demand was time-barred and the consequential penalties on the assessee and its director were unsustainable.

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Issues: Whether the extended period under the proviso to Section 11A(1) could be invoked in the absence of specific of fraud, collusion, wilful misstatement, suppression of facts, or contravention of law with intent to evade duty, and whether the duty demand and consequential penalties were sustainable.

Analysis: The notice relied on clandestine manufacture and clearance and on alleged duty evasion, but it did not specifically plead the essential ingredients required to attract the extended limitation period. The decisive requirement is not merely a reference to contravention or clandestine activity, but an express allegation that such conduct occurred with intent to evade duty. On the facts recorded, the notice lacked those specific averments, and the ratio governing invocation of the proviso to Section 11A(1) applied. Once the duty demand was held to be barred by limitation, the penalties imposed on the assessee and its director could not survive.

Conclusion: The extended period under the proviso to Section 11A(1) was wrongly invoked, the duty demand was time-barred, and the penalties were unsustainable.

Ratio Decidendi: Invocation of the extended limitation period under Section 11A(1) requires a specific allegation and basis of fraud, collusion, wilful misstatement, suppression of facts, or contravention of law with intent to evade duty; in the absence of such pleading, the demand cannot be sustained.

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