Extended limitation in service tax requires proof of wilful suppression; pre-notice tax and interest payment made the demand time-barred.

For invocation of the extended limitation period in service tax matters, the Department must establish wilful suppression or misrepresentation with cogent evidence. Where the non-payment was detected during audit, the tax and interest were paid before the show cause notice, and earlier audits had already brought the relevant facts within departmental knowledge, the extended period could not be invoked. The notice was therefore time-barred under the normal limitation period, and the pre-notice payment also supported protection against further adjudication. In the absence of proof of intentional evasion, penalties were not sustainable.

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Issues: Whether the show cause notice was barred by limitation and whether the extended period could be invoked on the allegation of suppression of facts, in the facts where the service tax and interest were paid before the notice.

Analysis: The non-payment for the disputed period was detected during audit, and the record showed that the tax was paid on the same day and interest was paid thereafter. Earlier audits had also been conducted, indicating that the relevant facts were already within the Department's knowledge. In these circumstances, the element of wilful suppression or misrepresentation was not established, and the Department could not invoke the extended period under the proviso to Section 73. Since the notice was issued beyond the normal limitation period, it was time-barred. The pre-notice payment of tax and interest also attracted the statutory protection against further adjudication, and no cogent evidence of intentional evasion was produced to justify penalty.

Conclusion: The extended period was not available, the notice was barred by limitation, and the demand and penalties could not be sustained.

Ratio Decidendi: For invocation of the extended period in service tax matters, the Department must prove wilful suppression or misrepresentation by cogent evidence, and where tax with interest is paid before the show cause notice and the facts were already within departmental knowledge, the demand is barred by limitation.

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