Extended excise demand fails where isolated higher-price clearances do not show suppression or justify normal-price rejection.

The extended demand period under the proviso to Section 11A of the Central Excise Act could not be invoked merely because a few clearances were made at prices higher than the approved price. Only three such instances occurred over about eight months, and the Department failed to show that the buyers formed a separate class or that the declared and approved price had ceased to represent the normal price. As the gate passes were filed with monthly returns, the record did not support suppression of vital facts. On these facts, the differential duty demand was not sustainable.

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Issues: Whether the proviso to Section 11A of the Central Excise Act, 1944 could be invoked to demand differential duty on the basis of a few stray clearances at prices higher than the approved price.

Analysis: The clearances in question were only three instances spread over a period of about eight months. The Department did not establish that the buyers concerned constituted a separate class or that the declared and approved price had ceased to represent the normal price. The gate passes were submitted with the monthly returns, and the material on record did not justify an allegation of suppression of vital information so as to attract the extended demand provision.

Conclusion: The proviso to Section 11A could not be validly invoked on these facts, and the demand of differential duty was not sustainable.

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