Extended limitation and suppression fail where import disclosures were filed regularly and classification remained debatable.

The extended period of limitation was not available where the imported bare films were disclosed in RT-12 returns and Bills of Entry regularly filed with the Department, putting the Department on notice of the classification position. Suppression could not be inferred merely from the classification lists describing metallised films as produced from goods under sub-headings 3901 to 3915, especially when a later CBEC clarification showed the classification issue was debatable. The appellants' understanding therefore had a defensible basis, and no suppression or misstatement with intent to evade duty was established.

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Issues: Whether the extended period of limitation could be invoked on the ground of suppression or misstatement with intent to evade duty.

Analysis: The appellants had described the imported bare films in the RT-12 returns and Bills of Entry, and those documents were regularly filed with the Department. The Department was therefore aware that the films were classifiable under sub-heading 3920.32. In such circumstances, suppression could not be attributed merely because the classification lists stated that the metallised films were produced from goods falling under sub-headings 3901 to 3915. The subsequent CBEC clarification of January 1989 also showed that the issue was debatable and that the appellants' understanding was not without basis.

Conclusion: The extended period of limitation was not available to the Department, and the appellants were not guilty of suppression or misstatement with intent to evade duty.

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