Extended limitation fails without suppression, but time-barred recovery does not create a refund right for otherwise taxable receipts.

Extended limitation was found unavailable where the assessee had disclosed the commission or incentive receipts through returns and the department already knew the underlying activity; a later notice on substantially similar facts could not rely on suppression merely because the service was differently classified, so the demand for the later period was time-barred. The refund claim also failed because tax paid under one category was not shown to be in excess of the lawful liability, and a finding that recovery is barred by limitation does not by itself create a right to refund of tax otherwise due on the transaction.

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Issues: (i) Whether the demand of service tax for the later period was barred by limitation and whether the extended period could be invoked on the facts of the case. (ii) Whether the assessee was entitled to refund of tax paid under one taxable category when the amount was otherwise found due under the correct head.

Issue (i): Whether the demand of service tax for the later period was barred by limitation and whether the extended period could be invoked on the facts of the case.

Analysis: The assessee had been filing returns and paying tax on the commission or incentive receipts, though under different taxable descriptions at different times. The department was already aware of the earlier period demand on the same activity and the later notice proceeded on substantially similar facts. In such circumstances, the element of suppression necessary for invoking the extended period was absent. Once the relevant facts were within the knowledge of the authorities, a subsequent notice on the same activity could not validly rely on extended limitation merely because the service was classified differently.

Conclusion: The demand for the later period was barred by limitation and the invocation of the extended period was unsustainable.

Issue (ii): Whether the assessee was entitled to refund of tax paid under one taxable category when the amount was otherwise found due under the correct head.

Analysis: The refund claim was based only on the fact that tax had been paid under a different service category. There was no material to show that the amount had been paid in excess of the lawful liability. The setting aside of the demand on limitation did not erase taxability of the underlying transaction. Limitation only restricts recovery and does not by itself create a right to refund of tax otherwise due.

Conclusion: The assessee was not entitled to refund.

Final Conclusion: The challenge to the demand failed on limitation and the refund claim also failed for want of excess payment, leaving no relief on the assessee's refund appeal and no basis for the Revenue's challenge.

Ratio Decidendi: Where the department is already in possession of the relevant facts, a second notice on the same activity cannot invoke the extended period on suppression grounds, and tax paid on a transaction that is otherwise taxable is not refundable merely because the recovery is barred by limitation.

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