Extended limitation and pre-deposit waiver fail where disclosed Chapter 39 classification makes suppression and Chapter 94 classification doubtful.

Suppression of facts was not made out at the prima facie stage where the assessee had disclosed manufacture of goods under Chapter 39 and had sought exemption for the disputed plastic CD tower and plastic audio cassette stand. The proposed classification under Chapter 94 was found doubtful because the goods appeared to be stands placed on furniture rather than furniture placed on the floor. On that basis, invocation of the extended period of limitation lacked prima facie support, and the assessee also established a substantial case for waiver of pre-deposit and stay of recovery pending appeal.

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Issues: Whether the assessee had suppressed facts so as to justify invocation of the extended period of limitation, and whether the assessee had made out a prima facie case for waiver of pre-deposit and stay.

Analysis: The assessee had been filing declarations claiming exemption under Notification No. 4/97-C.E. dated 01.03.1997 in respect of the goods manufactured, including the disputed plastic CD tower and plastic audio cassette stand. The goods were found, on a prima facie view, to be articles used as stands kept on a table or other furniture and not furniture placed on the floor, making the department's proposed classification under Chapter 94 doubtful. The declaration already indicated manufacture of products falling under Chapter 39, and the allegation of suppression was therefore not made out at this stage. The assessee's plea against invocation of the larger period and in support of Chapter 39 classification had substantial prima facie merit.

Conclusion: The assessee was entitled to waiver of pre-deposit and stay of recovery pending appeal.

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