Extended limitation requires deliberate suppression; sand moulds for iron castings fell within the exemption and the duty demand failed.

Extended limitation under the proviso to Section 11A of the Central Excise Act was treated as unavailable because suppression requires deliberate withholding of material facts with intent to evade duty; mere omission to furnish information was insufficient where the relevant facts and manufacture were already within departmental knowledge. Sand moulds used for iron castings were also treated as covered by the exemption notifications for moulds for metals. On that basis, the duty demand could not be sustained and was set aside in favour of the assessee.

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Issues: Whether the demand of central excise duty was sustainable by invoking the extended period under the proviso to Section 11A of the Central Excise Act, 1944, and whether the sand moulds were covered by the exemption notifications.

Analysis: Notification No. 220/86-C.E. dated 02.04.1986, as amended by Notification No. 279/86-C.E. dated 24.04.1986, exempted moulds for metals. Sand moulds used for manufacturing iron castings were treated as falling within that exemption. The facts and manufacture were within the department's knowledge, and the notice did not disclose ingredients necessary to justify the extended limitation period. Mere omission to furnish information, without deliberate intent to evade duty, was held insufficient to constitute suppression of facts.

Conclusion: The extended period under the proviso to Section 11A of the Central Excise Act, 1944 was not invocable, and the duty demand was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned demand could not be sustained.

Ratio Decidendi: Suppression of facts for the purpose of extended limitation requires a deliberate withholding of material information to evade duty; where the relevant facts are known to both sides, omission by the assessee does not amount to suppression.

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