Extended limitation under Customs law fails where goods were correctly described and no suppression of facts was shown.

The extended period of limitation under the Customs Act could not be invoked where the Bills of Entry correctly described the goods as JOSS Powder for making incense sticks, even though the chapter heading was wrong. The disclosure of the nature of the goods showed no suppression of material facts, and a wrong tariff declaration made on a bona fide claim did not amount to misdeclaration or dishonest intent. The reclassification dispute was not pressed, and the demand failed because the statutory ingredients for extended limitation were not established.

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Issues: Whether the extended period of limitation under the Customs Act, 1962 could be invoked in the absence of misdeclaration or suppression of facts, when the goods were correctly described in the Bills of Entry though the declared chapter heading was incorrect.

Analysis: The classification dispute was not pressed, and the reclassification of JOSS Powder under the correct tariff heading was accepted. The decisive question was whether the ingredients for invoking the extended limitation period existed. The description in the Bills of Entry specifically stated that the goods were JOSS Powder used for making incense sticks, which showed disclosure of the nature of the goods. The incorrect chapter heading by itself did not establish dishonest intent or suppression of material facts. A wrong declaration made on a bona fide claim does not amount to misdeclaration for invoking the extended period.

Conclusion: The extended period of limitation was not sustainable, and the demand could not be upheld on that basis. The appeal was allowed in favour of the appellant.

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