Extended limitation in central excise fails where approved classification and no proven suppression bar invocation of the longer period.

Classification of the goods under Chapter Heading 27.01, with classification lists already approved under Rule 173B of the Central Excise Rules, did not by itself establish wilful misstatement or suppression of facts. Because the department had no contemporaneous doubt, did not call for sample testing during the relevant period, and relied only on later records to allege suppression, the extended period under Section 11A of the Central Excise Act, 1944 was not available. The demand was therefore time-barred and the extended limitation was held unsustainable in favour of the assessee.

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Issues: Whether the demand was barred by limitation and whether the extended period could be invoked on the facts of the case.

Analysis: The products were classified by the assessee under Chapter Heading 27.01 and the classification lists were approved by the department under Rule 173B of the Central Excise Rules, 1944. The department had not shown any contemporaneous doubt about the classification, had not required testing of samples during the relevant period, and could not rely on later records to allege suppression for an earlier period. Mere classification under a different heading, without more, does not by itself establish wilful misstatement or suppression of facts. In the absence of material showing deliberate withholding of information, the extended period under Section 11A of the Central Excise Act, 1944 was not available.

Conclusion: The demand was held to be time-barred and the invocation of the extended period was held to be unsustainable, in favour of the assessee.

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