Extended limitation period for service tax cannot be used where final finding shows absence of mens rea and penalty was dropped.

The extended period of limitation for service tax on renting of immovable property was held inapplicable because the final finding was that the appellant, a government body, acted without mens rea. Penalty had already been dropped by the appellate authority on that basis, and that finding had attained finality. Relying on the cited precedent, the tribunal held that absence of mens rea barred invocation of the extended period to sustain the demand. The demand confirmed only by using the extended period was therefore set aside, while the remaining service tax dispute was left undisturbed.

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Issues: Whether the extended period of limitation for recovery of service tax on renting of immovable property was invokable.

Analysis: Penalty had already been dropped by the appellate authority on the finding that the appellant, being a government body, acted without mens rea. That finding had attained finality. On that basis, and following the cited precedent, the absence of mens rea meant that the extended period could not be invoked for confirming the demand.

Conclusion: The extended period of limitation was not invokable and the demand confirmed by invoking the extended period was set aside.

Final Conclusion: The appeal succeeded only to the extent that the time-barred demand was quashed, leaving the remaining service tax dispute undisturbed.

Ratio Decidendi: Where the final finding is that there was no mens rea, the extended period of limitation cannot be invoked to sustain the demand.

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