Extended limitation for duty evasion remains valid where notice facts establish deliberate suppression, with personal penalties sustained.

Extended limitation under the proviso to Section 11A(1) applies where pleaded facts establish conscious suppression and intent to evade duty, even if the show-cause notice does not reproduce the statutory language verbatim. The notes state that deliberate non-registration, non-filing of declarations, missing records, relabelling and repacking of imported goods, and duty-free clearances detected through investigation provided that factual basis, making the demand enforceable. Personal penalties under Rule 26 were also sustainable where the Director directed price-sticker replacement and duty-free clearances, and the Financial Advisor participated in the evasion; concurrent findings on their roles were not shown to be perverse.

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Issues: (i) Whether invocation of the extended limitation period under the proviso to Section 11A(1) was valid; (ii) Whether personal penalties on the Director and Financial Advisor under Rule 26 were sustainable.

Issue (i): Whether invocation of the extended limitation period under the proviso to Section 11A(1) was valid.

Analysis: The extended period applies where non-levy or short levy results from fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. The show-cause notice, read as a whole, set out the material facts demonstrating deliberate non-registration after crossing the exemption threshold, non-filing of declarations, absence of production, stock and sales records, relabelling and repacking of imported goods, and clearance of excisable goods without duty. These facts were detected only through departmental investigation. The absence of verbatim statutory language in the notice caused no prejudice because the factual foundation for deliberate suppression and evasion was clearly disclosed and answered.

Conclusion: The extended period under the proviso to Section 11A(1) was validly invoked against the assessee.

Issue (ii): Whether personal penalties on the Director and Financial Advisor under Rule 26 were sustainable.

Analysis: The factual findings established that the Director specifically directed removal and replacement of price stickers and clearance of excisable goods without payment of duty. The Financial Advisor was also found to have been involved in and responsible for the duty evasion. No perversity was shown in the concurrent factual findings regarding their respective roles.

Conclusion: The personal penalties under Rule 26 were sustainable against the Director and Financial Advisor.

Final Conclusion: The demand was enforceable using the extended limitation period, and the individual liabilities for participation in the evasion remained intact.

Ratio Decidendi: A show-cause notice validly supports invocation of the extended limitation period when its pleaded facts clearly establish conscious suppression and intent to evade duty, even without reproducing the precise statutory phraseology.

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