Extended limitation cannot be invoked without proof of suppression or intent to evade duty in a tariff classification dispute.

Extended limitation for demand of duty was held unsustainable where the record showed the department was aware of clearances under the claimed tariff classification and the assessee had already replied to the classification issue. No positive evidence established deliberate suppression of facts or any conscious intent to evade duty. The dispute was treated as a classification issue arising during a transitional regime after the introduction of the 8-digit tariff structure, and that fact pattern alone did not justify invoking the extended period. The duty demand based on extended limitation was therefore set aside in favour of the assessee.

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Issues: Whether the demand of duty could be sustained by invoking the extended period of limitation on the ground of suppression of facts with intent to evade duty.

Analysis: The dispute arose in the context of a classification change following the introduction of the 8-digit tariff structure. The materials on record showed that the department was aware that the goods were being cleared without payment of duty under a claimed tariff classification, and the assessee had also responded to the departmental communication asserting its stand on classification. The show cause notice was issued much later, and no positive evidence was produced to establish deliberate suppression or any conscious act intended to evade duty. In these circumstances, the matter was held to be one of classification in a transitional regime, which by itself did not justify invocation of the extended limitation period.

Conclusion: The invocation of the extended period of limitation was not sustainable, and the duty demand on that basis was set aside in favour of the assessee.

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