Approved classification and full disclosure bar extended limitation absent suppression or wilful misstatement

Where removals were made under an approved classification list and all material facts were disclosed, the extended limitation period under central excise law was unavailable absent fraud, suppression, or wilful misstatement with intent to evade duty. The demand was therefore time-barred because the show cause notices were issued beyond the normal period and a later change of view on classification could not revive limitation. The associated interest demand for the earlier period was also held unsustainable in light of the statutory provision relied upon. The appeals succeeded and the impugned orders were set aside.

---

---

Issues: Whether the demands of duty were barred by limitation and whether the extended period under the central excise law could be invoked on the facts of the case.

Analysis: The classification lists had been filed and approved, and the removals were made in accordance with the approved classification. The show cause notices were issued well beyond the normal period, and the record did not establish fraud, suppression, or wilful misstatement with intent to evade duty. In these circumstances, a subsequent change of opinion on the correct classification could not justify invocation of the extended limitation period. The levy of interest also could not stand for the earlier period in view of the statutory insertion relied upon by the parties and the Tribunal.

Conclusion: The demand was time-barred, the extended period was not available, and the interest demand was unsustainable.

Final Conclusion: The appeals succeeded and the impugned orders were set aside.

Ratio Decidendi: Where removals are made in accordance with an approved classification list and all material facts are disclosed, the extended period of limitation cannot be invoked in the absence of suppression or wilful misstatement with intent to evade duty.

---