Limitation for tax demand fails where valuation method was disclosed and suppression of facts was not established.

Where an assessee disclosed its valuation method in approved price lists and the department was already aware of the material facts through correspondence and audit material, suppression of facts was not established. The extended period of limitation could not therefore be invoked merely because the valuation basis was later disputed, and the demand was time-barred. As the demand fell outside the permissible limitation period, the duty demand and related penalties were set aside.

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Issues: Whether the demand and penalties were barred by limitation on the ground that the extended period could not be invoked.

Analysis: The valuation method adopted by the assessee for its own grey fabrics was disclosed in the price lists, which were finally approved. The departmental correspondence and audit material showed awareness of the valuation basis, and no notice was issued on the specific ground of adoption of the sale price formula. In these circumstances, the assessee could not be said to have suppressed material facts so as to justify invocation of the extended period.

Conclusion: The extended period of limitation was not available to the department, and the demand was time-barred.

Final Conclusion: The duty demand and all penalties were set aside, and the appeals succeeded.

Ratio Decidendi: Where the assessee has disclosed the relevant valuation method in approved price lists and the department has knowledge of the material facts, the extended period cannot be invoked in the absence of suppression of facts.

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