Registered assessee filing returns bars extended limitation and penalty where no suppression or mala fide intent is shown.

Where an assessee is registered and files ST-3 returns showing tax payment on the contractual value of services, the absence of separate evidence of goods value does not by itself establish suppression or mala fide intent. On that basis, the longer period of limitation is unavailable to the Revenue and the demand is confined to the normal limitation period. Once bona fide conduct is accepted, penalty provisions do not survive on the same facts, so the penalties are not sustainable and are deleted. The matter is then limited to re-quantification within the normal period.

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Issues: (i) Whether the extended period of limitation was available to the Revenue in the facts of the case. (ii) Whether the penalties imposed on the assessee were sustainable.

Issue (i): Whether the extended period of limitation was available to the Revenue in the facts of the case.

Analysis: The assessee was registered with the department and had been filing ST-3 returns showing payment of service tax on the value of services as reflected in the contracts entered into with a public sector undertaking. The dispute arose because the goods value was not separately evidenced in the contract or bills. In these circumstances, the record did not support a finding of mala fide intention or suppression so as to justify invocation of the longer period.

Conclusion: The extended period of limitation was not available to the Revenue.

Issue (ii): Whether the penalties imposed on the assessee were sustainable.

Analysis: Once the assessee's conduct was found to be bona fide and lacking mala fide intent, the foundation for sustaining penal consequences did not survive. The circumstances did not justify imposition of penalty.

Conclusion: The penalties were not sustainable and were set aside.

Final Conclusion: The demand was confined to the normal limitation period, the matter was remanded for re-quantification, and the penalties were deleted.

Ratio Decidendi: Where the assessee is registered, files returns, and acts on a contractual understanding of valuation, absence of mala fide and suppression precludes invocation of the extended limitation period and nullifies penalty.

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