Limitation for differential duty on tops failed where declaration was disclosed and no suppression justified extended period.

Differential duty on tops was held time-barred because the assessee had disclosed the declared value in March 1996 and cleared goods consistently on that basis, while the department was already aware of the declaration and earlier notices had been issued. On those facts, suppression of material facts with intent to evade duty was not established, so the extended period of limitation could not be invoked. The subsequent demand for April 1997 to June 2000 was therefore beyond limitation, and the penalties were unsustainable.

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Issues: Whether the demand of differential duty on tops was barred by limitation and whether the extended period could be invoked on the allegation of suppression of facts.

Analysis: The assessee had filed the value declaration for tops in March 1996 and continued to clear the goods to sister factories on the declared value. The department was aware of the declaration and had earlier issued notices, yet the subsequent order in October 1997 confirmed duty only on yarn and did not sustain any demand on tops. In these circumstances, there was no basis to hold that the assessee had suppressed material facts with intent to evade duty so as to justify invocation of the extended period. The later demand raised for the period April 1997 to June 2000 was therefore outside the permissible limitation period.

Conclusion: The demand was time-barred, the extended period of limitation was not available to the Revenue, and the penalties were unsustainable.

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