Extended limitation cannot sustain duty demand when goods were consistently declared and exemption was long approved without suppression.

Extended period of limitation could not be invoked to sustain a duty demand where the goods had been consistently disclosed in classification declarations, exemption had been approved for years under the relevant notifications, and no legally sustainable basis for suppression or misdeclaration was shown. The classification of the bushes and sleeves was not finally determined on merits and was left open for proper examination, but that did not justify recovery beyond the normal limitation period on the basis of a later change in classification view. The demand was therefore time-barred and the assessee succeeded on limitation.

---

---

Issues: Whether the duty demand and penalty were sustainable by invoking the extended period of limitation where the goods had been consistently declared in classification lists, exemption had been allowed for several years under Notification No. 5/98-C.E. dated 02.06.1998 and successor notifications, and the classification issue had not been conclusively established on merits.

Analysis: The classification of the impugned bushes and sleeves was not finally determined on merits in the appeals, and the matter was left open for proper examination. For limitation, however, the record showed that the assessees had filed classification declarations from time to time claiming exemption, the department had approved the classifications and allowed the benefit over a long period, and no basis was made out for alleging suppression so as to justify the longer period. In such circumstances, a demand raised beyond the normal period could not be sustained merely on a later change in view about classification.

Conclusion: The demand was held to be time-barred and the assessee succeeded on limitation.

Ratio Decidendi: Where goods have been consistently disclosed in approved classification declarations and exemption has been allowed over a prolonged period, the extended period of limitation cannot be invoked to recover duty absent a legally sustainable basis for suppression or misdeclaration.

---