Limitation under customs law barred the demand where extended period could not be justified on the facts.

Limitation governed the dispute, and the classification issue was not examined. A show cause notice issued about four years after the initial clearance was found unsustainable because the appellant had consistently classified prior and subsequent imports in the same manner, supporting a bona fide belief. The absence of penalty under Section 114AA of the Customs Act, 1962 did not itself establish that there was no suppression, but the record still did not justify use of the extended period. The principle applied was that the extended period under Section 28(1) is available only where suppression or wilful misstatement is established, so the demand was held time-barred.

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Issues: Whether the demand was barred by limitation and the extended period could be invoked in the facts of the case.

Analysis: The appeal was confined to limitation, and the classification dispute was not gone into. The show cause notice was issued about four years after the initial clearance. The appellant's prior and subsequent imports were consistently classified in the same manner without objection, which supported a bona fide belief. Non-imposition of penalty under Section 114AA of the Customs Act, 1962 was held not to amount to an admission that there was no suppression. Even so, on the facts, the record did not justify invoking the extended period, and the demand could not survive on limitation. Reliance was also placed on the principle that the extended period under Section 28(1) of the Customs Act, 1962 is available only where suppression or wilful misstatement is established.

Conclusion: The demand was held to be time-barred, and the appeal was allowed on limitation.

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