Extended limitation under excise law fails where the assessee disclosed facts and classification remained genuinely ambiguous.

Extended limitation under excise law cannot be invoked unless the department establishes suppression of facts or wilful misstatement. Here, the assessee had made contemporaneous disclosure of the manner of clearance and classification, and the record showed genuine classification ambiguity supported by a Board circular. In that setting, mere disagreement on classification, or the existence of an earlier notice, did not amount to suppression. The demand was therefore time-barred, the extended period was held inapplicable, and the revenue challenge to the dropped demand was rejected.

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Issues: Whether the extended period of limitation could be invoked for the duty demand, and whether the demand was time-barred in the absence of suppression of facts or wilful misstatement by the assessee.

Analysis: The assessee had informed the department through contemporaneous letters about the manner of clearance and classification of the goods, and the department did not dispute receipt of those communications. The record also showed ambiguity on classification, supported by the Board circular on power driven pump sets. In such circumstances, the ingredients required to invoke the extended period were not established. Mere disagreement on classification or the existence of an earlier notice did not by itself justify alleging suppression when the assessee had disclosed the relevant facts.

Conclusion: The extended period was not invocable and the demand was rightly held to be time-barred; the appeal failed.

Final Conclusion: The revenue challenge to the dropping of the demand was rejected, and the finding that the demand was barred by limitation was sustained.

Ratio Decidendi: Extended limitation under excise law cannot be invoked unless there is positive suppression of facts or wilful misstatement, and contemporaneous disclosure by the assessee coupled with bona fide classification ambiguity negatives such invocation.

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