Extended limitation period unavailable where facts were disclosed and no suppression or wilful misstatement to evade duty was shown.

The extended period of limitation cannot be invoked unless there is suppression of material facts or wilful misstatement with intent to evade duty. Here, the assessee had disclosed the clearance process, conversion of yarn into twine through job workers, generation and return of waste, and payment of duty on some twine clearances; the department was also aware of these facts and had been approached regarding use of waste. On that basis, the ingredients for the extended period were not established, and the demand was held time barred.

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Issues: Whether the demand was barred by limitation under the extended period, in the absence of suppression of facts or wilful misstatement with intent to evade duty.

Analysis: The appellants had disclosed the relevant clearance procedure, the conversion of yarn into twine through job workers, the arising of waste during such conversion, the return of waste to the factory, and the sale of some twine on payment of duty. The department was aware of these facts, and the record also showed that permission had been sought regarding utilisation of waste. On these facts, the ingredients required to invoke the extended period were not established.

Conclusion: The demand was time barred and the extended period of limitation was not available to the department.

Ratio Decidendi: Where the relevant facts are within the department's knowledge and there is no suppression of material facts or wilful misstatement with intent to evade duty, the extended period of limitation cannot be invoked.

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