Extended limitation cannot be invoked without suppression where goods were disclosed in statutory returns and declarations.

Disclosure of waste products in classification declarations and ER-1 returns negatived suppression, because the assessee had declared weaving hard waste, chindi waste and selvedge waste and the department raised no objection to the claimed exemption. Since the show cause notice and orders did not identify the tariff heading or applicable rate of duty, the extended limitation period was unavailable. On that basis, the duty demand was held time-barred and the connected penalty could not survive; the appeal was allowed for the assessee.

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Issues: Whether the duty demand on waste products and the connected penalty were sustainable when the assessees had disclosed the goods in classification declarations and ER-1 returns and the show cause notice and orders did not specify the tariff heading or rate of duty.

Analysis: The demand was raised on weaving hard waste, chindi waste and selvedge waste, but neither the show cause notice nor the orders below identified the tariff heading under which the goods were chargeable or the applicable rate of duty. The goods had been declared in classification declarations and in ER-1 returns, and exemption under Notification No. 27/95-C.E. had been claimed without any departmental objection. On these facts, there was no suppression of relevant information with intent to evade duty, so the extended limitation period was not available. The foundation for recovery of duty failed, and the penalty imposed for the alleged duty shortfall could not survive.

Conclusion: The duty demand was held time-barred and the penalty was unsustainable; the appeal was allowed in favour of the assessee.

Final Conclusion: Disclosure of the relevant facts in the statutory declarations negatived suppression and removed the basis for invoking the extended limitation period, with the result that the duty demand and penalty were set aside.

Ratio Decidendi: Where the assessee has disclosed the goods in statutory declarations and returns and the department has not objected, the extended period of limitation cannot be invoked in the absence of suppression of facts with intent to evade duty.

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