Extended limitation cannot apply after earlier proceedings on identical facts were dropped; the duty demand was held time-barred.

The extended period of limitation under the proviso to Section 11A(1) could not be invoked where prior proceedings on the same facts and for the same period had already been dropped and the matter had earlier been decided in the assessee's favour. On those facts, the allegation of suppression was not sustainable, so the duty demand was time-barred and the penalty could not survive. The impugned order was set aside and relief was granted to the assessee.

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Issues: Whether the demand of duty and penalty could be sustained by invoking the extended period of limitation under the proviso to Section 11A(1) of the Central Excises and Salt Act, 1944, when proceedings on the same facts and for the same period had already been dropped earlier.

Analysis: The prior proceedings on identical facts had been dropped by the Assistant Collector and the matter had again been dealt with in the assessee's favour in appeal. The department nevertheless initiated a third round on the same cause of action without properly considering the earlier adjudications. In these circumstances, the allegation of suppression could not justify invocation of the extended period, and the demand was also time-barred.

Conclusion: The extended period was not invocable and the demand could not be sustained. The impugned order was set aside and the appeal was allowed in favour of the assessee.

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