Extended limitation and suppression fail where clearances were disclosed; duty survives only for the identified normal-period clearance.

Extended limitation for duty demand was held inapplicable where the record showed prior disclosure of clearances, invoices, realization details, and departmental awareness, so suppression and intent to evade duty were not established. For the normal period, duty attached only to the identified clearance under the invoice dated 16-7-2004, with interest following the duty liability from the date it arose until payment, but penalty was not justified because the matter turned on duty consequence and classification rather than contumacious conduct. The demand was therefore confined to the single normal-period clearance.

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Issues: (i) whether the extended period of limitation could be invoked for duty demand on clearance of used drier screen felts; (ii) whether duty, interest, and penalty were payable on the clearances falling within the normal period.

Issue (i): whether the extended period of limitation could be invoked for duty demand on clearance of used drier screen felts.

Analysis: The record showed prior disclosure of clearances to the department, submission of invoices and realization details, and departmental correspondence indicating that the officers themselves had not treated the clearances as suppressed. In these circumstances, the ingredients of deliberate evasion, suppression, and intent to evade duty were not established.

Conclusion: The extended period of limitation was not invocable, and the demand beyond the normal period was unsustainable.

Issue (ii): whether duty, interest, and penalty were payable on the clearances falling within the normal period.

Analysis: For the normal period, only one sale covered by the invoice dated 16-7-2004 was held dutiable. The Tribunal applied the Larger Bench view in Navodhaya Plastic Industries Ltd. and the Board circular governing reversal of credit on removal of such goods, and held that the liability was confined to the normal-period clearance identified on the record. Since the dispute was one of classification and duty consequence rather than contumacious conduct, penalty was not warranted, though interest followed the duty liability.

Conclusion: Duty was payable only on the identified normal-period clearance, interest was payable from the date of liability till payment, and penalty was not leviable.

Final Conclusion: The demand was confined to the single normal-period clearance, the broader demand based on extended limitation failed, and the assessee obtained substantial relief from penalty and time-barred demand.

Ratio Decidendi: Extended limitation cannot be invoked where departmental awareness and prior disclosure negate suppression or intent to evade, and duty consequences for normal-period removals may still survive with consequential interest but without penalty where the facts do not justify penal action.

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