Incorrect 'd' factor declaration without wilful suppression cannot trigger extended limitation, interest, or mandatory penalty.

An incorrect declaration of the 'd' factor, made under a calculation error or misunderstanding and without deliberate concealment, could not justify the extended period of limitation. The show cause notice did not allege suppression of facts or wilful misstatement, and the record showed no mala fide intent. On that basis, the misdeclaration was treated as non-deliberate and insufficient to attract the extended limitation period. The consequential levy of interest and mandatory penalty was therefore not sustainable, and the relief granted to the assessee was upheld.

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Issues: Whether an incorrect declaration of the 'd' factor, made under a misunderstanding of calculation and without deliberate concealment, justified invocation of the extended period of limitation and imposition of interest and mandatory penalty.

Analysis: The show cause notice alleged misdeclaration of the 'd' factor and non-payment of duty, but did not contain an allegation of deliberate suppression or wilful misstatement. The record showed that the declaration issue arose from an error in calculation or misunderstanding, and not from any mala fide intent. On that basis, the failure to correctly state the 'd' factor could not be treated as deliberate misdeclaration so as to attract the extended limitation period or sustain the consequential levy of interest and penalty.

Conclusion: The issue was decided in favour of the assessee and against the Revenue; the extended period of limitation was not available and the orders setting aside interest and penalty were upheld.

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