Should I be honest about my past history of attending a Master degree in the past?
Consider the worst case scenario under each action: telling them and not telling them. 

Under the first it might be a bit harder to get accepted and your search might take longer. You have more to explain about how you will be a success.

Under the second, you are found out and expelled and blacklisted for dishonesty. Academia is a kind of a small place in each discipline. 

The best scenario for both is about the same.