Limitation barred excise demand where assessees fully disclosed product details and no suppression justified the extended period.

Full disclosure of the product's composition, manufacturing process, end-use and technical literature defeated any allegation of suppression or deliberate misdeclaration, so the extended period of limitation under excise law was not available. An earlier classification list had already been approved after departmental chemical verification, and the later dispute arose only from a subsequent opinion rather than any conclusive test withheld from the assessees. The demand, having been raised beyond the normal limitation period, was therefore unsustainable on limitation alone, and the accompanying penalty also fell.

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Issues: Whether the show cause notice and consequent duty and penalty demand were barred by limitation on the ground that the assessees had disclosed the nature, composition, process and end-use of the product at the relevant time, and whether the extended period under the excise law could be invoked for alleged misdeclaration.

Analysis: The assessees had filed classification lists and furnished details of the raw materials, manufacturing process, end-use and technical literature from the outset. An earlier classification list had been approved after the department's own chemical verification, and the later dispute arose from a subsequent opinion rather than a conclusive laboratory test communicated to the assessees. On these facts, there was no suppression, misstatement or deliberate misdeclaration with intent to evade duty so as to justify use of the extended period of limitation. The demand, being raised beyond the normal period, was therefore unsustainable on limitation alone, without entering into the merits of classification.

Conclusion: The demand and penalty were barred by limitation and were set aside in favour of the assessees.

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