Extended Limitation under indirect tax law fails where legal uncertainty existed and no fraud or misstatement is shown.

Extended period of limitation under indirect tax law cannot be invoked merely because the Department seeks to reopen a matter when the legal position was unsettled and conflicting Bench decisions existed until settled by a Larger Bench in 2010. The extended period is reserved for fraud, collusion or misstatement, and uncertainty in the law does not by itself justify its use. On that basis, the demand for duty and the related penalty were held not to survive.

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Issues: Whether the Revenue could invoke the extended period of limitation for recovery of duty and whether the consequent demand and penalty could be sustained.

Analysis: The issue turned on the existence of uncertainty in the law at the relevant time. Conflicting decisions of different Benches had existed until the Larger Bench settled the position in 2010. In such circumstances, the extended period, which is reserved for cases involving fraud, collusion or misstatement, could not be invoked merely because the Department sought to reopen the matter.

Conclusion: The invocation of the extended period of limitation was not justified, and the demand of duty and penalty did not survive.

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