Marketability and suppression disputes require fair cross-examination, defence evidence review, and proof of undisclosed facts before extended limitation applies.

Conflicting technical evidence on marketability required fair consideration of the assessee's defence, and denial of cross-examination of departmental experts could vitiate the adjudication. The record showed that the assessee had raised specific technical objections to the department's reports, but those objections were not properly examined before concluding that the product was dutiable. On limitation, the extended period could not be invoked merely for non-compliance with a procedural declaration if the department already knew the relevant manufacturing facts and could reasonably infer the product's existence. The matter was therefore remanded for fresh decision after considering the assessee's evidence and objections.

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Issues: (i) whether the product was marketable and liable to duty in view of the competing technical evidence and the denial of cross-examination of departmental experts; (ii) whether the extended period of limitation could be invoked on the allegation of suppression when the assessee had disclosed information about the manufacturing activity to the department.

Issue (i): whether the product was marketable and liable to duty in view of the competing technical evidence and the denial of cross-examination of departmental experts.

Analysis: The record contained conflicting technical opinions on the nature and shelf life of the product. The assessee produced material indicating that, without a viscosity depressant, the product formed lumps within a short time and could not be used for moulding, while the department relied on laboratory reports describing it as stable and marketable. In such a situation, the request to cross-examine the departmental experts was justified. The order under challenge did not properly deal with the assessee's technical evidence and placed exclusive reliance on departmental reports.

Conclusion: The finding on marketability and dutiability could not be sustained on the material as considered by the Commissioner, and the matter required fresh consideration.

Issue (ii): whether the extended period of limitation could be invoked on the allegation of suppression when the assessee had disclosed information about the manufacturing activity to the department.

Analysis: The assessee asserted that the department had been made aware of the manufacturing process and the existence of the product through earlier communications and factory records. If the department was in possession of information from which it could reasonably infer manufacture of the product, mere non-compliance with the procedural declaration requirement would not by itself establish suppression for the purpose of the extended period. The Commissioner did not address this aspect.

Conclusion: The invocation of the extended period could not be upheld without examining whether the relevant facts had already been disclosed to the department.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the matter was left for fresh decision in accordance with law after considering the assessee's evidence and objections.

Ratio Decidendi: When material technical evidence is controverted and the assessee seeks cross-examination of departmental experts, denial of such opportunity and non-consideration of defence evidence vitiate the adjudication; the extended period of limitation cannot be invoked unless suppression is established despite the department's prior knowledge of the relevant facts.

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