Extended limitation and suppression fail where non-disclosure occurs under bona fide classification and exemption belief.

Mere non-declaration of exclusive supply of goods to Railways did not amount to suppression of material facts with intent to evade duty where the assessee had a bona fide belief about classification under the prevailing tariff practice and exemption arrangement. On those facts, the extended period of limitation could not be invoked, the demand was barred by limitation, and the penalty could not be sustained. The article states that a factual non-disclosure, without the requisite intent to evade, is insufficient to justify extended limitation in duty matters.

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Issues: Whether the extended period of limitation could be invoked and penalty sustained on the ground of non-declaration of supply of the goods to Railways.

Analysis: The classification dispute was not pressed and the only surviving question was limitation. The goods had been treated as castings under the existing tariff practice and the assessee had a bona fide belief as to their classification in the light of the continuing exemption arrangement. On the facts, the non-disclosure regarding exclusive supply to Railways was not treated as suppression of material facts with intent to evade duty.

Conclusion: The extended period of limitation was not available to the Revenue, the demand was barred by limitation, and the penalty could not be sustained.

Final Conclusion: The duty demand and penalty were set aside and the appeal was allowed.

Ratio Decidendi: Mere non-declaration of a factual circumstance, when the assessee acts under a bona fide belief on classification and exemption, does not by itself constitute suppression with intent to evade duty so as to justify invocation of the extended limitation period.

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