Extended limitation and reverse charge service tax fail where no suppression or training consideration is proved.

Extended limitation could not be invoked where the assessee filed regular returns and the department was already aware of the activity, so suppression of facts was not shown. Service tax under reverse charge was also unsustainable because the evidence showed the expenditure was for travel and accommodation, the foreign party certified that no training fee was charged, and the adjudication went beyond the show cause notice by relying on a different basis. In the absence of consideration for the alleged training service and proof of taxability, the demand failed and the appellate relief was sustained.

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Issues: (i) Whether the extended period of limitation could be invoked on the facts of the case. (ii) Whether service tax was payable under reverse charge on the amount paid to the foreign service provider for the alleged training services.

Issue (i): Whether the extended period of limitation could be invoked on the facts of the case.

Analysis: The respondents had filed regular returns, and the departmental records showed awareness of the relevant activity. In the absence of suppression of facts, the larger limitation period could not be sustained.

Conclusion: The extended period was not available; only the normal limitation period could survive.

Issue (ii): Whether service tax was payable under reverse charge on the amount paid to the foreign service provider for the alleged training services.

Analysis: The demand was based on alleged training fees, but the evidence showed that the expenditure was towards travel, accommodation, and allied expenses, and the foreign company had certified that no training fee was charged. The adjudication also travelled beyond the show cause notice by confirming demand under a different set of provisions. In the absence of any consideration for training and without proof that the taxable service was partly rendered in India, service tax liability could not be fastened under reverse charge.

Conclusion: Service tax was not payable on the facts found, and the demand was unsustainable.

Final Conclusion: The Revenue's appeals failed and the relief granted by the appellate authority was sustained.

Ratio Decidendi: Where the recipient establishes that no consideration was paid for the alleged taxable service and the department fails to prove suppression or the factual basis for taxability, the demand and extended limitation cannot be sustained, particularly when the adjudication departs from the show cause notice.

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