Extended limitation and suppression applied where contract disclosure did not reveal exclusion of charges; penalty was reduced.

Production of a contract did not, by itself, show that the department was aware of the exclusion of advertisement charges from the assessable price. On the record, the separate payment and non-disclosure of that exclusion amounted to suppression, so the extended period of limitation was rightly invoked. The penalty was also re-examined in light of the duty demand and surrounding circumstances, and its quantum was moderated in the interests of justice. The appeal therefore failed on the demand and limitation issue, while the penalty was reduced.

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Issues: (i) Whether the extended period of limitation was invocable on the facts of the case; (ii) Whether the penalty imposed was liable to be reduced.

Issue (i): Whether the extended period of limitation was invocable on the facts of the case.

Analysis: Production of the contract before the authorities did not by itself establish that the department was made aware that the advertisement charges were not included in the price lists. The non-disclosure of the separate payment and exclusion of those charges from the assessable price constituted suppression on the material available on record.

Conclusion: The extended period of limitation was rightly invoked.

Issue (ii): Whether the penalty imposed was liable to be reduced.

Analysis: The penalty was examined in relation to the duty demand and the circumstances of the case, and it was considered appropriate to moderate the quantum in the interests of justice.

Conclusion: The penalty was reduced from Rs. 4,000 to Rs. 2,500.

Final Conclusion: The demand and limitation finding were sustained, but the penalty was brought down, with the appeal otherwise failing.

Ratio Decidendi: Mere production of a contract does not amount to disclosure of all material facts if the specific exclusion of a charge from the price is not made known to the department; such non-disclosure can justify invocation of the extended limitation period.

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