Extended limitation under service tax law fails without proof of suppression or mala fide intent where disclosures were made.

Extended limitation cannot be invoked to sustain a service tax demand unless the Revenue proves suppression, mis-statement, or mala fide intent by positive evidence. Where the assessee disclosed the relevant transactions in its balance sheet and the underlying taxability issue was legally debatable, the extended period was unavailable. The demand was therefore held time-barred, and the related interest and penalty were also set aside.

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Issues: Whether the demand of service tax could be sustained by invoking the extended period of limitation.

Analysis: The demand was raised for an earlier period on the ground that the appellant had not paid service tax and had not filed returns. The appellant had reflected the relevant transactions in its balance sheet and the Revenue had relied on those records. The existence of prior Tribunal decisions supporting the view that no further tax is payable by a subcontractor where the principal contractor has discharged tax on the full contract value, and the reference of the merits issue to a Larger Bench, showed that the legal position was debatable. In such circumstances, the Revenue was required to establish suppression or mis-statement with mala fide intent by positive evidence, which was absent.

Conclusion: The extended period of limitation was not available to the Revenue, and the demand, along with interest and penalty, was set aside as time-barred.

Ratio Decidendi: Extended limitation cannot be invoked in the absence of positive evidence of suppression or mala fide intent, particularly where the assessee's conduct reflects disclosure and the issue is legally debatable.

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