Extended limitation under section 11A needs specific allegations of suppression or wilful mis-statement in the notice to sustain demand.

Extended limitation under the proviso to section 11A requires a clear and specific allegation in the show cause notice of suppression of facts or wilful mis-statement with intent to evade duty. Where the notice only referred to continued availment of proforma credit and a wrong declaration, but omitted such an averment, the extended period could not be invoked. On that basis, the duty demand and penalty were unsustainable, and the dispute was decided in favour of the assessee without examination of the merits.

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Issues: Whether the extended period under the proviso to section 11A could be invoked when the show cause notice did not specifically allege suppression of facts or wilful mis-statement.

Analysis: The notice merely referred to continued availment of proforma credit and to a wrong declaration, but it did not contain a specific averment that the assessee had suppressed facts or made a wilful mis-statement with intent to evade duty. The statutory requirement for invoking the extended limitation period is a clear and specific allegation in the notice itself. In the absence of such an allegation, the demand could not be sustained on the basis of the proviso to section 11A, and the merits of the dispute were not examined further.

Conclusion: The extended period was not invocable and the penalty and duty demand could not be sustained. The issue is decided in favour of the assessee.

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