Wilful misstatement and suppression not proved where approved classification list and returns disclosed the goods

Wilful misstatement or suppression to invoke the proviso to Section 11A(1) of the Central Excise Act was not established where the assessee had filed an approved classification list and declared the same goods in its returns. A mere incorrect classification, or a later change of opinion on the proper heading or sub-heading, did not by itself prove intent to evade duty. Because the department had access to the relevant declarations and could have revised the classification after hearing the assessee, there was no material showing concealment of true facts or deliberate evasion. The extended period of limitation was therefore unsustainable.

---

---

Issues: Whether the proviso to Section 11A(1) of the Central Excise Act could be invoked on the ground of misstatement or wilful intent to evade duty where the assessee had filed an approved classification list and declared the same goods in the relevant returns.

Analysis: The classification list had been filed and approved, and the goods cleared were the same as those described in the classification list and GP 1. In such a situation, a mere incorrect classification or change of opinion on the proper heading or sub-heading does not by itself establish wilful misstatement or suppression with intent to evade duty. If the department considered the classification incorrect, it could have altered the classification after giving the assessee an opportunity of hearing. On the facts found, there was no material showing concealment of true facts or deliberate evasion.

Conclusion: The proviso to Section 11A(1) was not attracted, and the invocation of the extended period of limitation was unsustainable. The appeal was allowed in favour of the assessee.

---