Approved classification lists may defeat extended limitation based on suppression where the department had earlier accepted the classification.

Approved classification lists can weaken an allegation of suppression for invoking the extended limitation period, because prior approval by the jurisdictional Assistant Collector shows departmental examination and acceptance of the classification. A later change of view on the correct classification, without more, is not enough to treat the assessee's earlier declaration as misdeclaration or suppression. On that prima facie basis, the reasoning for invoking the extended period was unsustainable, and unconditional stay with waiver of duty and penalty was considered justified pending appeal.

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Issues: Whether the extended period of limitation could be invoked on the basis of alleged misdeclaration and suppression when the classification lists had earlier been approved by the jurisdictional Assistant Collector.

Analysis: The approved classification lists indicated that the Department had examined and accepted the classification at the relevant time. Once the Assistant Collector had approved the classification under Rule 173B, the Department could not, on a later change of view as to the correct classification, treat the assessee's earlier declaration as suppression or misrepresentation without more. The facts disclosed a prima facie case on limitation, making the reasoning relied upon for invoking the extended period unsustainable at this stage. In the circumstances, unconditional stay and waiver of duty and penalty were justified pending disposal of the appeal.

Conclusion: The invocation of the extended period was not accepted at the prima facie stage, and the assessee was entitled to stay and waiver of pre-deposit.

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