Extended limitation cannot be invoked without proved suppression or deliberate misdeclaration in fabric classification disputes.

The extended period of limitation could not be invoked where the department already knew of the disputed classification after the first test report, yet issued the show cause notice only nearly seven months later. The assessee's declaration matched the supplier's description of the grey fabrics, and it had no independent facility to test fibre composition. On those facts, suppression or deliberate misdeclaration was not established, so the demand for the extended period was not sustainable.

---

---

Issues: Whether the demand could be sustained by invoking the extended period of limitation on the allegation of suppression or deliberate misdeclaration by the assessee.

Analysis: The duty demand arose from a change in classification after test reports showed predominance of synthetic fibres in the fabric. The department had knowledge of the wrong declaration once the first test result was received, yet the show cause notice was issued only after nearly seven months. The assessee's declaration was based on the supplier's description of the gray fabrics, and it had no facility to independently test the composition. On these facts, the essential ingredients for invoking the extended period were not made out.

Conclusion: The extended period of limitation was not available to the department, and the demand for the extended period could not be sustained. The appeal was allowed in favour of the assessee on limitation.

---