Limitation and extended period fail where assessee relied on the prevailing exemption view in bona fide belief.

The demand was held time-barred because the assessee's computer training activity was, during the relevant period, covered by the then-prevailing Tribunal view that such training qualified as vocational training and was exempt. A later Supreme Court view changing the position did not, by itself, establish suppression, wilful misstatement or intent to evade tax for the earlier period. On the record, the assessee was entitled to rely on the contemporaneous legal position and act under a bona fide belief that no service tax was payable. The extended period was therefore not invocable, and consequential relief followed.

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Issues: Whether the demand was barred by limitation and whether the extended period could be invoked against the assessee.

Analysis: The assessee's computer training activity for the period July 2004 to March 2005 was covered, at the relevant time, by the Tribunal's then-prevailing view that such training fell within vocational training and was exempt under the applicable exemption notifications. The later view of the Supreme Court rendered the law differently, but that subsequent reversal did not by itself establish suppression, wilful misstatement, or intent to evade tax for the earlier period. In the circumstances, the assessee was entitled to rely on the contemporaneous legal position and to act under a bona fide belief that no service tax was payable. The material on record did not justify invocation of the extended period.

Conclusion: The demand was held to be time-barred and the appeal was allowed with consequential relief.

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