Bona fide belief on exemption defeated extended limitation where suppression and intent to evade duty were not proved.

A bona fide belief that castings remained classifiable and exempt after the tariff change was accepted where the assessee relied on the long-standing earlier classification practice and the continued exemption under Notification No. 208/83-C.E. Filing exemption declarations, rather than a classification list, was treated as consistent with that belief. On those facts, the elements needed to invoke the extended limitation period, namely wilful misstatement or suppression of facts with intent to evade duty, were not established. The duty demand was therefore treated as wholly time-barred and set aside in favour of the assessee.

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Issues: Whether the demand of duty was barred by limitation on the ground that the assessee entertained a bona fide belief that the goods continued to be classifiable and exempted as castings.

Analysis: The long-standing practice of classifying castings under the earlier tariff and the continuance of exemption under Notification No. 208/83-C.E. after the tariff change were held sufficient to create a bona fide belief that the goods remained exempt. The assessee's filing of exemption declarations instead of a classification list was treated as consistent with that belief. In these circumstances, the ingredients required to invoke the longer limitation period, namely wilful misstatement or suppression of facts with intent to evade duty, were not established.

Conclusion: The demand of duty was held to be wholly barred by time and was set aside in favour of the assessee.

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