Extended limitation requires proof of suppression or intent to evade; mere ER-1 omission was insufficient, so demand failed.

The extended limitation period under Section 11A(4) of the Central Excise Act, 1944 was unavailable because the Department did not establish fraud, wilful misstatement, suppression of facts, or intent to evade duty. The dispute over classification and non-declaration of clearances had been contemporaneously raised after audit, and the assessee consistently maintained a bona fide classification view; mere omission from the ER-1 return was insufficient to prove the necessary intent. As a result, the demand was barred by limitation and was set aside, and the connected interest and penalty demands also could not survive.

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Issues: Whether the demand was barred by limitation and, if so, whether the consequential demand of interest and penalty could survive.

Analysis: The relevant period was April and May 2013, while the show cause notice was issued on 29.02.2016. The record showed that the dispute over classification and non-declaration of clearances was contemporaneously raised by the appellant after audit, and the appellant consistently asserted a bona fide view on classification. For invoking the extended period under Section 11A(4) of the Central Excise Act, 1944, the Department was required to establish fraud, wilful misstatement, suppression of facts, or contravention with intent to evade duty. On the facts found, mere non-declaration in the ER-1 return did not establish the requisite intent, and the extended limitation period was not available.

Conclusion: The demand was held to be barred by limitation and was set aside. The consequential demand of interest and penalty also could not stand.

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