Extended limitation unavailable where full disclosure and approved classification defeated any allegation of suppression or misstatement.

A product declared from the outset in classification lists as a textile auxiliary under Tariff Item 68, and repeatedly checked, verified and approved by departmental officers, was treated as sufficiently disclosed. On those facts, no misstatement or suppression of facts could be attributed to justify the extended limitation period. Once the Department had accepted the declared classification and later changed its view, past demands could not be raised under the extended period. The demand was therefore time barred and the limitation defence succeeded in favour of the assessee.

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Issues: Whether the show cause notice and demand were barred by limitation on the ground that no misstatement or suppression of facts had been established so as to justify invocation of the extended period.

Analysis: The product had been declared from the outset, classification lists were filed describing it as a textile auxiliary and claiming classification under Tariff Item 68, and those lists were repeatedly checked, verified and approved by the departmental officers. On those facts, the Court held that the assessee had made sufficient disclosure and that no intention to evade duty by suppression or misstatement could be attributed. Once the Department had accepted the declared classification and later sought to adopt a different view, the extended period could not be invoked for past demands.

Conclusion: The demand was time barred and the invocation of the extended period failed in favour of the assessee.

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