Extended limitation under excise law fails where facts were known to the department and no suppression or evasion is shown.

Extended limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 was unavailable where the department had long known of the assessee's method of filing separate price lists and assessing goods on that basis, and an earlier audit objection had already been raised and disputed. A later objection was followed by a show cause notice after more than one year and five months, with no explanation for the delay. On these facts, there was no material to infer deliberate suppression, wilful misdeclaration, or intent to evade duty, and the assessee's conduct was treated as bona fide; the notice was therefore time-barred.

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Issues: Whether the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act, 1944 could be invoked on the facts of the case.

Analysis: The department had been aware of the appellant's method of filing separate price lists and assessing the goods on that basis since 1979, when the audit objection was first raised and communicated to the appellant. The appellant had promptly disputed the objection, and the matter was allowed to rest for years. The subsequent objection in 1986 was followed by a show cause notice after a further delay of more than one year and five months, without any explanation for the delay. In these circumstances, there was no basis to infer deliberate suppression of facts, wilful misdeclaration, or intent to evade duty. The appellant's conduct was found to be bona fide.

Conclusion: The proviso to Section 11A(1) of the Central Excise Act, 1944 was not available and the show cause notice was barred by limitation.

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