Extended limitation not invocable where facts were disclosed and duty liability arose from a genuine tax dispute.

Duty demand on the transmission assembly was held time-barred because the extended limitation period could not be invoked. The assessee had consistently disclosed its manufacturing set-up, filed a revised classification list, and explained the shift to a single integrated assembly line; the non-payment arose in a genuine dispute on duty liability, with marketability and taxability already subject to conflicting views until settled by the Supreme Court. On these facts, there was no suppression of facts or wilful misstatement, so the demand failed on limitation and the appeals succeeded.

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

Analysis: The liability on merits had already been settled by the Supreme Court, so the only surviving question was limitation. The appellants had consistently disclosed the manufacturing set-up, revised classification list, and the shift to a single integrated assembly line. The change in the revised classification list was explained by the change in process, and the controversy on marketability and taxability of the product had itself been subject to conflicting views until finally resolved by the Supreme Court. On these facts, there was no material to hold that the appellants suppressed facts or made a wilful misstatement, and the non-payment arose in the setting of a genuine dispute on duty liability.

Conclusion: The extended period of limitation was not invocable and the demand was time-barred. The impugned order was set aside and the appeals were allowed in favour of the assessee.

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