Extended limitation and penalty fail where disclosures were already before the department and no wilful suppression was shown.

Extended limitation under Section 11A was not available because the classification lists, RT-12 returns and gate passes had been regularly filed and scrutinised, showing departmental awareness of the clearances and the nature of the goods. In the absence of wilful suppression of facts or intent to evade duty, the longer limitation period could not be invoked, and the demand founded on that period was time-barred. As the demand itself failed on limitation, the penalty under Rule 173Q(1) could not survive and was unsustainable.

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Issues: Whether the extended period of limitation under Section 11A could be invoked on the facts, and whether the penalty imposed under Rule 173Q(1) could survive once the demand was found time-barred.

Analysis: The classification lists, RT-12 returns and gate passes had been filed and scrutinised by the department from time to time, showing that the department had knowledge of the clearances and the nature of the goods. The record did not establish wilful suppression of facts or any intent to evade duty, which are necessary for invoking the longer limitation period under the proviso to Section 11A. Since the demand itself was founded on the extended period, the departmental action could not be sustained when the goods had been declared and the dispute arose from a classification understanding already before the department.

Conclusion: The extended period was not invocable, the demand was barred by time, and the penalty was unsustainable.

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