Extended limitation for duty demand fails where classification was disclosed and approved, negating wilful suppression.

Extended limitation for duty recovery on the basis of misclassification and wilful suppression was unavailable where the assessee had disclosed the nature of the goods and the basis of classification in the classification list, and the departmental officer had approved it. In those circumstances, the disclosure of material facts negatived any allegation of deliberate suppression, because invocation of the extended period requires proof of intent to evade duty. The demand could not be sustained on that basis, and consequential relief followed.

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Issues: Whether the extended period of limitation could be invoked for recovery of duty on the ground of misclassification and alleged wilful suppression, when the assessee had disclosed the basis of classification in the classification list and the same had been approved by the departmental officer.

Analysis: The departmental authorities had approved the classification list after the assessee disclosed the nature of the goods and the basis on which they were claimed as pilferproof caps. In such a situation, invocation of the extended period required proof of intention to evade duty. Where the material facts were disclosed and the classification had been approved, the allegation of wilful suppression could not be sustained.

Conclusion: The extended period of limitation was not available to the department, and the demand could not be sustained on that basis. The appeal succeeded with consequential relief.

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