Customs classification requires proof of misdeclaration; without suppression, extended limitation and penalty cannot stand.

In customs classification disputes, the Revenue must prove misdeclaration before treating imported high-pressure cleaners and parts as car washing machines or related appliances. Where the importer's declaration matched the manufacturer's description and the goods were assessed and cleared without admissible evidence of false classification, the demand could not be sustained. The extended limitation period under the Customs Act also required proof of suppression of facts, which was not established on the record; the consequential penalty therefore could not survive. The impugned orders were set aside and relief followed accordingly.

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Issues: (i) Whether the imported high-pressure cleaners and their parts were liable to be treated as car washing machines and related appliances for customs classification and duty purposes; (ii) whether the demand, penalty, and invocation of the extended period of limitation were sustainable in the absence of proof of suppression or misdeclaration.

Issue (i): Whether the imported high-pressure cleaners and their parts were liable to be treated as car washing machines and related appliances for customs classification and duty purposes.

Analysis: The importer had made declarations on the basis of the manufacturer's description, and the goods were cleared on assessment by the proper officer. The record did not contain admissible evidence establishing that the declared classification was false. Even on the assumption of dual use, there was no material showing use contrary to the stated agricultural and dairy purposes. In a classification dispute, the burden lay on the Revenue to establish the alleged misclassification.

Conclusion: The allegation of misdeclaration was not proved, and the Revenue's classification-based demand could not be sustained.

Issue (ii): Whether the demand, penalty, and invocation of the extended period of limitation were sustainable in the absence of proof of suppression or misdeclaration.

Analysis: The demand had been raised long after clearance, and the Revenue was required to establish suppression of facts for invoking the extended period under Section 28 of the Customs Act, 1962. On the facts found, no such suppression was established. In the absence of proof of deliberate wrongdoing, the consequential penalty also could not survive.

Conclusion: The extended period of limitation and the penalty were unsustainable.

Final Conclusion: The impugned orders were set aside and the appeals were allowed with consequential relief in accordance with law.

Ratio Decidendi: In a customs classification dispute, the Revenue must prove misdeclaration or suppression of facts before sustaining a demand beyond the normal period, and an assessment-cleared declaration cannot be displaced without such proof.

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