Extended limitation fails absent suppression, while varnished glass sleevings classification was remanded for fresh chemical testing.

The extended limitation period could not be invoked because the Department already knew the manufacture and process, correspondence on classification was continuous, and the record did not show suppression or misdeclaration; the duty demand was therefore time-barred in favour of the assessee. On classification, varnished glass sleevings had to be tested against the relative predominance of fibre and varnish, but the factual record was inadequate and the chemical composition had not been properly established; the Tribunal therefore remanded the matter for chemical testing and fresh adjudication, with no final finding on the correct tariff entry.

---

---

Issues: (i) Whether the duty demand was barred by limitation for want of suppression or misdeclaration so as to justify invocation of the extended period. (ii) Whether varnished glass sleevings were classifiable under Tariff Item 22F or Tariff Item 22B.

Issue (i): Whether the duty demand was barred by limitation for want of suppression or misdeclaration so as to justify invocation of the extended period.

Analysis: The Department had knowledge of the manufacture and process from the time of inspection and there was continuous correspondence between the parties on the proper classification and exemption claim. The appellants had consistently asserted bona fide classification under Tariff Item 22F and claimed exemption, while the Department itself took differing positions during the relevant period. On these facts, the record did not support deliberate suppression or misstatement of material facts.

Conclusion: The extended period could not be invoked and the demand was time-barred, in favour of the assessee.

Issue (ii): Whether varnished glass sleevings were classifiable under Tariff Item 22F or Tariff Item 22B.

Analysis: Glass fibre fabrics were treated as textile fabrics, and the material on record indicated that the product could fall within Tariff Item 22F where mineral fibre or yarn predominated in weight. However, the record before the Tribunal was insufficient to determine the actual predominance of varnish or fibre in the disputed product. Since the chemical composition had not been properly established and the test results had not been communicated, the matter required fresh factual determination.

Conclusion: The classification issue was remanded for chemical testing and fresh adjudication, with no final finding on the tariff entry.

Final Conclusion: The demand was held time-barred, but the classification dispute was sent back for fresh decision on the basis of proper testing and hearing.

Ratio Decidendi: Where the Department is aware of the manufacture and there is no suppression or misdeclaration, the extended period of limitation cannot be invoked; where tariff classification turns on predominance of constituents and the factual record is insufficient, the matter must be remanded for fresh determination.

---