Customs exemption claims and limitation: extended period cannot apply without suppression when disclosure was made at clearance.

Import exemption under Notification No. 52/03-Cus or, alternatively, Notification No. 153/93-Cus was held unavailable because the prescribed conditions and required authorisation or permission were not satisfied on the recorded facts, so the exemption claim failed on merits. On limitation, disclosure to Customs and production of supporting certificates at clearance meant the department knew of the exemption claim from the outset; suppression was not established, so the extended period could not be invoked and the show cause notice was time-barred. The demand therefore could not survive the limitation objection, and consequential relief followed.

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Issues: (i) Whether the appellant was entitled to exemption under Notification No. 52/03-Cus dated 31.03.2003 or alternatively under Notification No. 153/93-Cus dated 13.08.1993; (ii) whether the show cause notice was barred by limitation.

Issue (i): Whether the appellant was entitled to exemption under Notification No. 52/03-Cus dated 31.03.2003 or alternatively under Notification No. 153/93-Cus dated 13.08.1993.

Analysis: The exemption under Notification No. 52/03-Cus was available to the importer only if the importer satisfied the prescribed conditions and was authorised to establish the unit for the specified purposes. The alternative claim under Notification No. 153/93-Cus also required the necessary permission for import under the relevant scheme. On the facts recorded, those conditions were not satisfied.

Conclusion: The claim to exemption was not sustainable on merits and was decided against the assessee.

Issue (ii): Whether the show cause notice was barred by limitation.

Analysis: The import was made with disclosure to the Customs authorities and supporting certificates were produced at the time of clearance. The department was aware of the claim of exemption from the beginning, yet the show cause notice was issued much later by invoking the extended period. In these circumstances, suppression of facts was not established and the extended period could not be applied.

Conclusion: The show cause notice was time-barred and the proceedings were hit by limitation, in favour of the assessee.

Final Conclusion: The impugned order was set aside because the demand could not survive the limitation objection, and the appeal succeeded with consequential relief.

Ratio Decidendi: Where the department is aware of the import and the exemption claim at the time of clearance, the extended period cannot be invoked in the absence of suppression of facts; a time-barred notice cannot sustain the demand.

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