Suppression of facts not proved, so extended limitation failed and the duty demand and penalty were unsustainable.

Extended limitation could not be invoked where the classification list and price list were disclosed to the department, the goods were examined by the officer, and the appellant had also reflected the goods in its returns. On those facts, suppression of facts was not established, so the duty demand was barred by limitation and the penalty could not survive. The finding of suppression was therefore set aside in favour of the assessee.

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Issues: Whether the demand of duty and penalty could be sustained by invoking the extended period of limitation on the ground of suppression of facts.

Analysis: The classification list filed by the appellant described the goods and was examined by the departmental officer, who consciously altered the classification and the rate of duty under Rule 173B of the Central Excise Rules, 1944. The record also showed that the relevant price list referred to the packing and was received by the department, and the appellant had disclosed the goods in its returns. On these facts, the basis for alleging suppression was not established, and the longer period of limitation could not be invoked.

Conclusion: The demand was barred by limitation and the penalty could not survive; the finding of suppression was set aside in favour of the assessee.

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