Extended limitation for duty demand fails without proof of wilful suppression or intent to evade in fibre declaration disputes.

Extended-period duty recovery under Section 11A could not be sustained because the Department failed to prove wilful misdeclaration, suppression, or intent to evade duty. The only test results relied on were for fabrics, not blended yarn, and the technical material indicated that fabric testing can cause variation in blend composition. Other samples matched the assessee's declaration, and the declaration was treated as a bona fide marginal declaration rather than conscious evasion. In the absence of proof of intent to evade, penalty was also unwarranted. The demand was therefore barred by limitation and the differential duty confirmation was set aside.

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Issues: Whether the demand for differential duty could be sustained for the extended period under Section 11A of the Central Excises & Salt Act, 1944 on the basis of alleged misdeclaration of fibre content, and whether the declaration made by the assessee amounted to wilful suppression or intent to evade duty.

Analysis: The only test results relied upon were of fabrics, not of blended yarn, and the technical material placed on record indicated that fabric testing can produce variation in blend composition. The record also showed that other samples matched the declaration and that departmental instructions contemplated sampling of such yarn. In these circumstances, the declaration was treated as a marginal one made on a bona fide basis, and the facts did not establish wilful misdeclaration or conscious evasion. The absence of penalty was also consistent with the conclusion that the element of intent to evade duty was not proved.

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

Final Conclusion: The demand confirming differential duty was set aside, and the appeal succeeded solely on the ground of time-bar.

Ratio Decidendi: The extended limitation period for duty demand cannot be invoked unless the Department establishes wilful misdeclaration, suppression, or intent to evade duty; a bona fide marginal declaration does not justify extended-period recovery.

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