Service tax limitation under Section 73 barred demand beyond five years, requiring fresh quantification and penalty reconsideration.

Section 73 of the Finance Act, 1994 does not permit service tax recovery beyond five years from the relevant date, even where the extended period is invoked for suppression. As the demand covered a period extending beyond that maximum limitation and the show cause notices were issued on 30.05.2012, only the portion within five years could survive. The impugned orders were therefore set aside, and the matter was remanded for fresh quantification within the permissible period together with reconsideration of penalty.

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Issues: Whether a service tax demand could be sustained for a period beyond five years from the relevant date under Section 73 of the Finance Act, 1994, and the consequential effect on demand and penalty.

Analysis: The demand related to the period 2006-07 to 2010-11, while the show cause notices were issued on 30.05.2012. Section 73 of the Finance Act, 1994 permits recovery within the prescribed limitation period, including the extended period in cases involving suppression, but does not authorise a demand beyond five years. Since the demand travelled beyond the maximum permissible period, only the portion falling within five years from the date of the show cause notice could survive. The reduction in the demand would also affect the penalty quantum, which required reconsideration by the Original Adjudicating Authority.

Conclusion: The demand beyond five years was unsustainable, the impugned orders were set aside, and the matter was remanded for fresh quantification within the permissible limitation period along with reconsideration of penalty.

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