Wilful suppression and assessable value proof are essential for extended limitation under central excise demand disputes.

Assessable value cannot be enhanced on a cost component unless the department proves that the disputed replacement material was actually received or borne as alleged. On transit insurance, inclusion of the related cost was not enough by itself to justify concealment where the assessee was not shown to have known of the insurance arrangement or withheld any supporting document. The extended limitation period under the proviso to section 11A(1) of the Central Excise Act, 1944 requires wilful suppression of facts known to the assessee; a mere failure to enquire further is insufficient. The demand was therefore barred by limitation.

---

---

Issues: (i) Whether the cost attributable to alleged burning loss replacement material and transit insurance was includible in the assessable value. (ii) Whether the demand invoking the extended period was barred for want of wilful suppression of facts.

Issue (i): Whether the cost attributable to alleged burning loss replacement material and transit insurance was includible in the assessable value.

Analysis: The materials on record did not show that any extra aluminium was supplied as replacement for burning loss during manufacture. In the absence of evidence that such replacement material was actually received, the addition on that count could not be sustained. As regards transit insurance, the inclusion of insurance-related cost in the assessable value was not disputed, but the assessee was not shown to have been aware of the insurance arrangement or to have received any document from which such liability could be ascertained.

Conclusion: The addition on account of alleged burning loss replacement material was not sustainable, while the insurance-related issue did not furnish a basis for adverse action on the ground of concealment.

Issue (ii): Whether the demand invoking the extended period was barred for want of wilful suppression of facts.

Analysis: The extended period under the proviso to section 11A(1) of the Central Excise Act, 1944 requires wilful suppression. Suppression presupposes knowledge of the fact allegedly concealed. Since the assessee was not shown to have known of the transit insurance or to have withheld any document relating to it, mere failure to make further enquiries did not amount to wilful suppression.

Conclusion: The demand was barred by limitation and the proviso to section 11A(1) could not be invoked.

Final Conclusion: The appeal succeeded and the assessee obtained relief against the impugned demand.

Ratio Decidendi: For invocation of the extended period under section 11A(1), the department must establish wilful suppression of a fact known to the assessee; mere omission to verify or enquire is insufficient, and additions to assessable value must rest on evidence that the disputed cost component was actually received or borne as alleged.

---