Limitation and extended period: prior disclosure of contracts and invoices defeated suppression-based duty demand.

Duty demand was held time-barred because the department had already been put on notice of the relevant facts, including fabrication work, free supply of raw materials by the buyer, the contracts, and the invoices. On the disclosed material, clearances were made on fabrication charges alone, and omission of the value of free-supplied material could not be treated as suppression with intent to evade duty. The annual declaration relied on by the Revenue did not override the specific contracts and earlier disclosures, and the department had sufficient material to examine valuation within time. The extended period was therefore not sustainable, and the demand was barred by limitation.

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Issues: Whether the demand of duty was barred by limitation and whether the extended period could be invoked on the basis of alleged suppression or misdeclaration of facts.

Analysis: The relevant facts concerning the fabrication work, the free supply of raw materials by the Railway Coach Factory, the contracts, and the invoices had already been brought to the notice of the Revenue authorities years earlier. The contracts obtained by the department showed that raw materials were supplied by the buyer against bank guarantee and that the clearances were made on the basis of fabrication charges alone. In such circumstances, the non-inclusion of free-supplied raw material value could not responsibly be treated as suppression with intent to evade duty. The annual declaration relied upon by the Revenue did not displace the effect of the specific contracts and earlier disclosures, and the department had sufficient material to examine valuation in time.

Conclusion: The invocation of the extended period was not sustainable, and the demand was barred by limitation.

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