Suppression of material facts was not proved, so the extended limitation period could not justify the demand.

Extended limitation could not be invoked where the record did not support suppression of material facts. The classification list showed pharmacopoeial abbreviations against other products, but roxithromycin was left unmarked, indicating no claim that it conformed to pharmacopoeial standards. The department also had access to the relevant returns and invoices, and the omission to cite the precise exemption notification was not enough to establish suppression when the notice proceeded on a different factual basis. On these facts, there was no ground to apply the extended period, and the demand was time-barred.

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Issues: Whether the extended period of limitation could be invoked on the ground of suppression of material facts, and whether the demand was therefore time-barred.

Analysis: The dispute turned on whether the appellant had withheld the relevant fact that roxithromycin was not shown as conforming to pharmacopoeial standards. The record showed that in the classification list three products were expressly marked with pharmacopoeial abbreviations, while roxithromycin was not so marked, making it apparent that no such claim was made for that product. The objection that the correct exemption notification for the relevant period was not specifically cited was also insufficient, since the department had access to the relevant returns and invoices, and the allegation in the notice was founded on a different premise altogether. On this material, there was no adequate basis to infer suppression for invoking the extended period.

Conclusion: The extended period of limitation was not available and the demand was barred by limitation, in favour of the assessee.

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