Extended limitation for service tax demands requires proof of statutory fraud or suppression; absent that, late notices fail.

Extended limitation under Section 73 of the Finance Act, 1994 applies only where the Revenue proves fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax. Where show-cause notices are issued beyond the normal period and the record contains no material establishing those statutory ingredients, the demand cannot be sustained as time-barred. The discussion also notes that the question whether reimbursable expenses formed part of the taxable value was left undecided.

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Issues: Whether the service tax demands were barred by limitation under Section 73 of the Finance Act, 1994 in the absence of fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade tax.

Analysis: The show-cause notices were issued more than one year after the relevant period. For invocation of the extended period, the Revenue had to establish circumstances bringing the case within the statutory exceptions. On the record, there was no material to show fraud, collusion, wilful misstatement, suppression of facts or any contravention with intent to evade payment of service tax. As the notices did not satisfy the requirements for extended limitation, the demands could not survive. The question whether reimbursable expenses formed part of the taxable value was therefore left undecided.

Conclusion: The demand was held time-barred and the appeals succeeded.

Ratio Decidendi: Extended limitation under Section 73 of the Finance Act, 1994 can be invoked only on proof of the statutory ingredients, and in their absence a demand raised beyond the normal limitation period is barred.

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