Wilful misstatement and minor notification error: extended limitation applied and the duty demand was sustained.

A declaration based only on presumption, without material evidence linking the fibre to duty-paid imports, was treated as a wilful misstatement. The extended limitation period under the proviso to Rule 10(1) therefore applied, and the duty demand was not time-barred. A wrong reference to a notification number in the show cause notice was held to be inconsequential because the relevant exemption notification was otherwise clear and the party had been heard on the substance. The proceedings were not vitiated, and the duty demand was sustained.

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Issues: (i) Whether the demand of duty was barred by limitation in view of the declaration and departmental knowledge, and (ii) whether misquoting the notification number in the show cause notice vitiated the proceedings.

Issue (i): Whether the demand of duty was barred by limitation in view of the declaration and departmental knowledge.

Analysis: The declaration regarding duty-paid acrylic fibre was found to rest on presumption and not on substantiated material. In the absence of evidence correlating the fibre with duty-paid imports, the declaration was treated as a wilful misstatement. On that basis, the extended period under proviso to Rule 10(1) applied, and approval of a general classification list did not amount to satisfaction of the proper officer about the duty-paid nature of the fibre for the goods in question.

Conclusion: The demand was not time-barred and the plea of limitation failed against the assessee.

Issue (ii): Whether misquoting the notification number in the show cause notice vitiated the proceedings.

Analysis: The wrong mention of Notification No. 85/77 instead of Notification No. 133/77 was held to be inconsequential because the goods were concerned only with Notification No. 133/77, and the petitioners had been heard before the order was passed.

Conclusion: The error in the show cause notice did not invalidate the proceedings.

Final Conclusion: The revision application failed, and the impugned duty demand was sustained.

Ratio Decidendi: A declaration unsupported by material evidence and made on presumption amounts to wilful misstatement attracting the extended limitation period, and a mistaken reference to the notification number is not fatal where the relevant exemption notification is otherwise clear and the party is heard on the substance.

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