Extended limitation requires independent evidence of suppression; disclosed clearances defeat penalty and remand duty re-quantification.

Where an assessee disclosed the relevant clearances in statutory ER-1 returns, the extended period of limitation could not be invoked absent independent evidence of suppression or wilful misstatement. The demand therefore could not be sustained on the basis of extended limitation. The duty computation was remanded for fresh quantification with adjustment of duty already paid, as that issue required reworking by the adjudicating authority. Because the extended period failed on the facts, the foundation for mandatory penalty also fell away, and penalty was held not imposable.

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Issues: (i) Whether the demand could be sustained by invoking the extended period of limitation. (ii) Whether the quantum of duty required fresh computation with adjustment of duty already paid, and whether penalty survived.

Issue (i): Whether the demand could be sustained by invoking the extended period of limitation.

Analysis: The clearance details were disclosed in the ER-1 returns, including the value of clearances made to other brand name owners. The sole basis for invoking the extended period was non-disclosure of such clearances, but the record did not disclose any additional cogent or positive evidence to establish suppression or wilful misstatement. In the absence of such evidence, the ground for invoking the extended period failed.

Conclusion: The invocation of the extended period of limitation was not sustainable and the demand could not be upheld on that basis.

Issue (ii): Whether the quantum of duty required fresh computation with adjustment of duty already paid, and whether penalty survived.

Analysis: The computation of duty had already attained finality in the earlier order, but the question of adjustment of duty already paid remained relevant. The matter was therefore required to be worked out afresh by the adjudicating authority for correct quantification, with credit for duty already paid. Since the extended period was unavailable on the facts, the basis for mandatory penalty also disappeared.

Conclusion: The matter was remanded for re-quantification of duty after giving adjustment of duty already paid, and mandatory penalty was held not imposable.

Final Conclusion: The appeals were disposed of by remand, with the assessee succeeding on limitation and penalty, while the duty liability was left to be reworked by the adjudicating authority.

Ratio Decidendi: Where the assessee has disclosed the relevant clearances in statutory returns and no independent evidence of suppression is shown, the extended period cannot be invoked; consequentially, penalty founded on such extended limitation is not sustainable, and duty already paid must be adjusted in re-quantification.

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