Extended limitation for duty demand upheld where unilateral reclassification and non-disclosure supported suppression and intent to evade duty.

The extended period of limitation was invocable for duty demand on Aluminium Hydroxide Gel because the assessee had earlier classified the product under an approved heading, then unilaterally reclassified it and stopped paying duty without departmental approval. Non-disclosure of production and clearance in statutory records and returns supported suppression and wilful misdeclaration with intent to evade duty. The conduct was not treated as a bona fide classification error, and the ingredients for invoking the extended limitation period were satisfied; the demand was therefore not time-barred.

---

---

Issues: Whether the extended period of limitation was invocable for the demand of duty on Aluminium Hydroxide Gel on the ground of suppression and wilful misdeclaration with intent to evade duty.

Analysis: The appellants had earlier classified the product under the approved heading, later reclassified it on their own, and stopped payment of duty. The department had not approved the changed classification, and the appellants also did not reflect production and clearance of the product in the statutory records and returns. Their conduct was not supported by any valid reason and could not be treated as a bona fide classification error. On these facts, the ingredients for invoking the extended period were made out.

Conclusion: The extended period of limitation was rightly applied and the demand was not time-barred.

---