Extended limitation for duty demand barred where no suppression was shown despite continued exemption-based payments.

The extended limitation period for duty demand under the proviso to Section 11A(1) was not available because the assessee's conduct did not amount to suppression. Although Notification No. 175/86 stood suspended during the relevant period by Notification No. 202/86, the assessee continued paying duty as if the exemption applied, and the department assessed the RT-12 return without raising any objection to the short payment. On these facts, the demand had to be raised within the normal limitation period, and the proposed demand was barred by limitation.

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Issues: Whether the extended period of limitation under the proviso to Section 11A(1) could be invoked for demanding duty for the relevant period.

Analysis: The benefit of Notification No. 175/86 had been suspended during the relevant period by Notification No. 202/86, while the assessee continued to pay duty as if the exemption remained available. The department had assessed the RT-12 return without pointing out the short payment, and the facts did not justify a finding of suppression by the assessee. In these circumstances, the demand ought to have been raised within the normal time under Section 11A.

Conclusion: The extended period was not invokable, and the demand was barred by limitation.

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