Extended limitation for duty demand fails where department knew of the changed exemption view and issued notice too late.

Duty demands were held time-barred where clearances had been made under an exemption based on departmental clarification and the later withdrawal of that clarification did not excuse a prolonged delay in issuing the notice. The department was already aware of the changed view, the factory inspection occurred much later, and the notice was issued beyond the normal limitation period. In the absence of any material showing suppression, wilful misstatement, or other conduct justifying a longer period, invocation of the extended limitation period was not justified.

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Issues: Whether the duty demands were barred by limitation and whether the extended period could be invoked in the facts of the case.

Analysis: The goods were cleared under an exemption based on departmental clarification and the subsequent withdrawal of that clarification did not justify an inordinate delay in issuing the notice. The record showed that the department was aware of the change in view, the factory was visited much later, and the notice was issued beyond the normal period. There was no material to show any conduct on the part of the respondent warranting invocation of the longer period.

Conclusion: The demands were barred by limitation and the invocation of the extended period was not justified.

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