Extended limitation and penalty fail where disclosure existed and the dispute arose from a bona fide interpretation of exemption notifications.

Extended limitation under excise law was not available because the record showed disclosure of the other unit and no evidence of wilful suppression or intent to evade duty; the omission was treated as a bona fide interpretational error regarding the exemption notifications. Penalty could not be sustained on that basis, and the demand survived only for the period within the normal limitation period.

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Issues: Whether the extended period of limitation could be invoked and penalty sustained when the appellant had disclosed the existence of the other unit but had not furnished complete clearance details under the exemption notifications.

Analysis: The clearance value of the Kapurthala unit was relevant for determining the exemption available to the Hoshiarpur unit, but the record did not show any intention to evade duty. The omission was treated as arising from a misunderstanding of the exemption notification provisions and from a difference in interpretation rather than from wilful suppression. In the absence of evidence of intent to evade, the conditions for invoking the extended period were not satisfied, and penalty could not be justified.

Conclusion: The extended period of limitation was held to be inapplicable and the penalty was set aside. The duty demand was sustained only to the extent falling within the normal period of limitation.

Ratio Decidendi: Extended limitation and penalty under excise law cannot be sustained without proof of wilful suppression or intent to evade duty, particularly where the dispute arises from a bona fide interpretational error regarding exemption notifications.

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