Approved classification cannot be retrospectively disturbed; suppression was not proved, so extended limitation failed.

Approved classification lists and subsequent declarations, once duly approved by the proper officer, could not be retrospectively displaced merely because the department later adopted a different view. The note states that no new material was withheld at the time of approval and the show cause notice did not reveal facts unavailable to the approving authority, so suppression or wilful misstatement was not established for invoking the extended period. On that basis, the duty demand and penalty could not be sustained under the extended limitation, and any departmental change in view would operate prospectively rather than retrospectively. The issue was decided in favour of the assessee.

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Issues: Whether the duty demand and penalty could be sustained by invoking suppression or wilful misstatement despite the classification lists having been filed and approved by the proper officer, and whether the approved classification could be altered retrospectively for the purpose of demand.

Analysis: The classification list effective from 1.4.95 and the subsequent declarations were found to have been duly approved by the proper officer. The record did not show any new evidence withheld from the department at the time of approval, nor did the show cause notice disclose material facts that were unavailable to the approving authority. In these circumstances, the finding of suppression or wilful misstatement necessary to justify the extended period under Section 11A was not made out. The approval of classification by the proper officer could not be displaced retrospectively merely because the department later preferred a different view. The principle that there is no estoppel in taxation was accepted, but any change in the department's view would operate prospectively and not retrospectively. The Tribunal also noted that the department failed to produce anything contrary to the concurrent factual findings of the lower authorities.

Conclusion: The demand by invoking the extended period was not sustainable and the approved classification could not be retrospectively disturbed; the issue was decided in favour of the assessee.

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