Absolute exemption conditions and suppression of material facts justified denial of relief and upheld the extended limitation period.

Extended limitation was upheld because the classification list did not disclose that the furniture was partly made of wood, and no bona fide misunderstanding or absence of suppression was shown. Exemption under Notification 80/90 was denied because the notification required the furniture to be made wholly of material other than Chapter 44 material, and the presence of wood made the condition unmet; the extent of wood used was held irrelevant because the condition was absolute. The duty-demand challenge also failed, as the alleged rate error was unsupported by the notice, worksheet, or record. The demand and denial of exemption were sustained.

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Issues: (i) Whether the extended period of limitation under the proviso to section 11A(1) was invocable on the facts; (ii) Whether the appellant was entitled to the exemption under Notification 80/90 notwithstanding the use of wood falling under Chapter 44; (iii) Whether the duty demand was erroneous because the rate applied was allegedly higher than the correct rate.

Issue (i): Whether the extended period of limitation under the proviso to section 11A(1) was invocable on the facts.

Analysis: The notification benefit had been claimed, but the classification list did not disclose that the furniture was partly made of wood. No material was produced to show bona fide misunderstanding or absence of suppression. The factual basis for invoking the extended period was therefore accepted.

Conclusion: The extended period of limitation was rightly applied.

Issue (ii): Whether the appellant was entitled to the exemption under Notification 80/90 notwithstanding the use of wood falling under Chapter 44.

Analysis: The exemption condition required the furniture to be made wholly of material other than material falling within Chapter 44. The presence of wood from Chapter 44 meant the condition was not satisfied. The extent of wood used was held to be irrelevant because the notification prescribed an absolute condition.

Conclusion: The exemption was not available to the appellant.

Issue (iii): Whether the duty demand was erroneous because the rate applied was allegedly higher than the correct rate.

Analysis: The challenge to the rate of duty was unsupported by the show cause notice or any worksheet, and the demand was not shown to be . The appellate record did not establish any error in the computation adopted by the Commissioner.

Conclusion: The duty demand was upheld.

Final Conclusion: The demand and denial of exemption were sustained, and the appeal was dismissed.

Ratio Decidendi: Where an exemption notification prescribes a clear and specific eligibility condition, non-disclosure of material facts and non-fulfilment of that condition justify denial of exemption and may support invocation of the extended limitation period.

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