Extended limitation and suppression fail where clearances were disclosed, with demand confined to excluded supplies only.

The extended limitation period was not available where the assessee had disclosed manufacture of compressors and air-conditioners in classification lists and RT 12 returns, and the department was already aware of the nature of clearances. On those facts, suppression or wilful misstatement was not established, so the demand and penalty could not be sustained for the exempted clearances. The Tribunal also treated the amendment to the exemption notification as clarificatory, limiting the longer period from being invoked on that basis. Only supplies to IMF and Skylark remained outside the exemption claim, and the matter was left for requantification for that limited category.

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Issues: Whether invocation of the extended period of limitation was justified and whether the demand and penalty could be sustained for clearances covered by the exemption claim.

Analysis: The assessee had disclosed the manufacture of compressors and air-conditioners in classification lists and RT 12 returns, and had claimed exemption for compressors under the relevant notification. The record also showed departmental awareness of the manner of clearance and the nature of the supplies. In these circumstances, the facts necessary to sustain an allegation of suppression or wilful misstatement were not made out. The Tribunal also followed its earlier view that the amendment to the exemption notification was clarificatory and that, on the evidence, the longer limitation period could not be invoked. The demand survived only for the limited category of supplies to IMF and Skylark, with the matter requiring requantification.

Conclusion: The extended period of limitation was not available against the assessee except for the limited supplies expressly excluded, and the penalty was set aside for the balance demand.

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