Extended limitation under Customs law requires proved suppression; bona fide belief and prior approval defeated the demand.

The article notes that the extended period of limitation under the Customs Act could not be invoked where the notice was issued beyond the normal period and the record showed a bona fide belief supported by prior departmental approval, Customs assessment of bills of entry, a contemporaneous exemption claim, and an earlier decision in the assessee's own matter. On those facts, the ingredients of suppression and misdeclaration were not established. As a result, the demand for additional duty, interest, and penalties was held unsustainable and set aside.

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Issues: Whether the extended period of limitation under the Customs Act was invocable on the facts, and whether the demand of additional duty of customs, interest, and penalties could be sustained.

Analysis: The notice was issued beyond the normal limitation period and proceeded on alleged suppression and misdeclaration. The prior departmental approval, the assessment of bills of entry by Customs, the contemporaneous claim for exemption, and the earlier decision in the appellant's own matter supported a bona fide belief that the activities were treated as manufacturing. On those facts, the requisite ingredients for invoking the extended period were not established.

Conclusion: The extended period of limitation was not available to the Revenue. The demand, interest, and penalties were unsustainable and were set aside in favour of the assessee.

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