Approved classification and full disclosure defeat extended limitation where suppression is not proved.

Full disclosure of the manufacturing process and classification particulars, followed by departmental approval of the classification list, prevented the later invocation of suppression to reopen the classification. The department alleged that the goods were parts of an electrostatic precipitator and sought reclassification, but it produced no technical or other evidence to dislodge the approved position or show incomplete disclosure. On that basis, the extended limitation period could not be applied and the reclassification demand failed. Duty demand and penalties were therefore not sustainable, and the impugned demand was set aside with consequential relief.

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Issues: Whether the demand of duty and penalties could be sustained when the appellant had disclosed the manufacture and process in the classification list, obtained approval of the classification, and the department sought to reclassify the goods and invoke the extended period on the allegation of suppression of facts.

Analysis: The appellant had obtained an L-4 licence, filed the classification list with particulars of the fabrication work, manufacturing process, ground plan, and activity, and the proper officer had approved the classification after scrutiny. The department later alleged that the goods were parts of an electrostatic precipitator and proceeded on suppression, but no technical or other evidence was produced to dislodge the approved classification or to show that the disclosure was incomplete. In these circumstances, the attempt to reopen the classification and invoke the extended period was held to be unsustainable.

Conclusion: The demand was barred by limitation, the reclassification was not established, and the duty demand and penalties could not be sustained in favour of the assessee.

Final Conclusion: The appeal succeeded because the department failed to prove suppression or to justify departure from the approved classification, and the impugned demand and penalties were set aside with consequential relief.

Ratio Decidendi: Where the assessee has fully disclosed the nature of manufacture and the department has approved the classification after scrutiny, the extended period cannot be invoked and a later reclassification demand fails in the absence of evidence of suppression or misstatement.

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