Conditional exemption and suppression of facts upheld where duty-free clearances exceeded the prescribed limit.

The conditional exemption under Notification No. 71/78-C.E. applied only up to the prescribed value limit, and duty became payable on clearances beyond that threshold. Failure to issue gate passes for rubber sheets cleared at nil rate, together with omission of their value from the R.T. 12 returns, supported a finding that relevant information had been withheld from the department. Approval of the classification list did not extend the exemption beyond its stated limits. On that basis, the demand was held to be within limitation, suppression of facts and misstatement with intent to evade duty were established, and the Revenue's appeal succeeded.

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Issues: Whether the demand of duty was barred by limitation or whether the extended period could be invoked on the ground of suppression of facts and misstatement with intent to evade duty.

Analysis: The exemption under Notification No. 71/78-C.E. was conditional and available only up to the prescribed value limit. Once the assessee crossed that limit, duty had to be paid on further clearances. The respondents did not issue gate passes for rubber sheets cleared at nil rate and also omitted their value from the R.T. 12 returns. Approval of the classification list could not protect them beyond the limited conditional exemption, and the conduct supported an inference that relevant information had been withheld from the department.

Conclusion: The demand was not barred by limitation, suppression of facts and misstatement with intent to evade duty were established, and the appeal succeeded in favour of the Revenue.

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