Extended limitation under excise law fails where amalgamation and credit transfers were already known, barring the demand as time-barred.

Extended limitation under the proviso to section 11A(1) of the Central Excises and Salt Act, 1944 was unavailable where the department already knew of the amalgamation, transfer of licences and transfer of proforma credit. The correspondence showed that the transferee unit had disclosed the relevant facts and that the department had acted on that basis. In the absence of deliberate misstatement, suppression of facts, or withholding of material information, the demand raised long after the relevant period was barred by limitation.

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Issues: Whether the demand was time-barred and whether the extended period under the proviso to section 11A(1) of the Central Excises and Salt Act, 1944 could be invoked in the absence of suppression of facts.

Analysis: The demand related to the period 1-3-1985 to 16-3-1985, while the show cause notice was issued on 7-3-1989. The correspondence on record showed that the department was aware of the amalgamation of the transferee company with the erstwhile entity, the transfer of licences, and the transfer of proforma credit. The department had also permitted transfer of the credit balance and had acted on the basis that the benefit attached to the amalgamated unit. On these facts, there was no deliberate misstatement, suppression, or withholding of material information to justify the extended limitation period.

Conclusion: The extended period was not available to the department and the demand was barred by limitation.

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