Extended limitation and penalty in excise law turn on suppression proof and statutory penalty authority, with remand and penalty set aside.

Extended limitation under the proviso to Section 11A(1) requires proof of suppression of material facts, and the record on price lists and invoice disclosures was incomplete; the matter was therefore remanded for a fresh finding on limitation after verification of the relevant entries. Penalty under Rules 173Q and 226 could not be sustained for alleged evasion of additional duty where the governing Additional Duties of Excise statute did not itself provide a penalty provision; the penalty was set aside.

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Issues: (i) Whether the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944 could be invoked on the alleged suppression of material facts relating to the assessable value and excess collection in the price lists. (ii) Whether the penalty imposed under Rules 173Q and 226 of the Central Excise Rules, 1944 could be sustained in relation to additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Issue (i): Whether the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944 could be invoked on the alleged suppression of material facts relating to the assessable value and excess collection in the price lists.

Analysis: The disputed demand turned on whether the excess amount collected in invoices had been disclosed through the price lists and related documents, and whether any apparent rounding off in the figures showed that the proper officer had material before him sufficient to notice the discrepancy. Since the record before the appellate forum was incomplete and the invoices and gate passes for all items were not available, a complete verification of the limitation issue was necessary. The adjudicating authority was expected to examine whether the entries in the price lists truly amounted to suppression of relevant facts.

Conclusion: The invocation of the extended limitation provision was not finally upheld; the matter was remanded for a fresh finding on limitation.

Issue (ii): Whether the penalty imposed under Rules 173Q and 226 of the Central Excise Rules, 1944 could be sustained in relation to additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Analysis: The demand related to additional duty under the special duty statute, and the appellate forum noted that the governing enactment did not itself contain a penalty provision. On that basis, penalty could not be imposed merely because additional excise duty was alleged to have been evaded.

Conclusion: The penalty was set aside.

Final Conclusion: The demand was not finally affirmed, the penalty was annulled, and the case was sent back for fresh adjudication limited to the limitation issue after verification of the relevant price list entries.

Ratio Decidendi: Extended limitation requires proof of suppression of material facts, and penalty cannot be imposed for evasion of a levy where the charging statute does not provide for such penalty.

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