Extended limitation under service tax law needs intent to evade; disclosed commission receipts and bona fide belief defeated the demand.

Service tax demand was held time-barred because the extended limitation period could not be invoked without proof of fraud, suppression, wilful misstatement, or deliberate intent to evade tax. The assessee had disclosed the commission income in its balance sheet and had a bona fide belief that the receipts were not taxable in light of the relevant exemption notifications and amendment. On those facts, mere non-payment did not justify invocation of the extended period under service tax law, and the demand was set aside.

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Issues: Whether the demand of service tax was barred by limitation and whether the extended period could be invoked on the facts of the case.

Analysis: The assessee had received commission for procuring orders and the dispute turned on whether non-payment of service tax involved suppression of facts with intent to evade. The findings recorded that the commission received was disclosed in the balance sheet and that the assessee entertained a bona fide belief regarding taxability in the context of Notification No. 13/2003-ST dated 20.06.2003 and its later amendment by Notification No. 8/2004-ST dated 9.07.2004. The reasoning further held that invocation of the extended period under Section 73 required a positive element of fraud, suppression, wilful misstatement, or deliberate intent to evade, which was not established on the facts.

Conclusion: The demand was barred by limitation and the extended period was not available to the Revenue.

Final Conclusion: The Revenue's challenge failed and the order setting aside the demand was maintained.

Ratio Decidendi: The extended period of limitation under service tax law can be invoked only when suppression or misstatement is accompanied by an intent to evade tax; mere non-payment arising from bona fide belief or disclosed accounts is insufficient.

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