Extended limitation cannot be used where exemption classification was uncertain and assessees acted under bona fide belief.

The extended period of limitation was unavailable where castings had been treated as exempt under Notification No. 208/83-C.E. and the post-tariff-change classification position remained uncertain. The Tribunal accepted that similarly situated assessees continued to receive the exemption, the Department itself was unclear for some time, and the assessees' bona fide belief was supported by earlier decisions. On that basis, the longer limitation period could not be invoked and the duty demand was quashed on limitation, although the appeal failed on merits.

---

---

Issues: Whether the extended period of limitation was available to the Department for confirming the duty demand.

Analysis: The goods had been treated as exempt castings under Notification No. 208/83-C.E., and there was confusion in the post-tariff-change position as to whether the goods continued to fall within the exempted category. The Tribunal noted that the assessees similarly situated had continued to enjoy the exemption, that the Department itself was uncertain about the proper classification for some time, and that the appellants' claim of bona fide belief was supported by earlier decisions following the same reasoning. On that basis, the Department was not entitled to invoke the longer period.

Conclusion: The extended period of limitation was not invokable and the demand was quashed on limitation, though the appeal failed on merits.

---