Extended customs limitation fails where royalty inclusion was unsettled and deliberate suppression was not proved.

Extended limitation under Customs law requires deliberate suppression of material facts or wilful misstatement with intent to evade duty. Where the legal position on inclusion of royalty or licence fee in assessable value was unsettled during the import period, mere non-disclosure of the licence fee did not, by itself, prove suppression. The burden remained on the Revenue to justify invocation of the extended period, and a debatable legal position negatived any inference of deliberate evasion. On that basis, the duty demand, interest and penalty were treated as time barred.

---

---

Issues: Whether the extended period of limitation under the Customs law was invokable on the basis of suppression of facts or wilful misstatement, and whether the duty demand, interest and penalty were time barred.

Analysis: The dispute turned on whether the importer had deliberately withheld material facts with intent to evade duty. The Tribunal found that during the relevant import period the legal position on includibility of royalty or licence fee in the assessable value was unsettled, with some decisions supporting the assessee and others supporting the Revenue. In that setting, the Court held that mere non-disclosure of the licence fee could not, by itself, establish wilful suppression. The burden to justify the extended period remained on the Revenue, and the existence of a doubtful legal position negatived the allegation of deliberate evasion.

Conclusion: The extended period of limitation was not invokable. The demand of duty, interest and penalty was rightly held to be time barred, and the conclusion was in favour of the assessee.

Ratio Decidendi: The extended limitation period can be invoked only on proof of deliberate suppression or wilful misstatement with intent to evade duty; where the law is debatable or unsettled and the material facts are not shown to have been concealed with such intent, the demand is barred by limitation.

---