Limitation bars extended-period demand where merits are not pressed, while normal-period liability and interest remain sustained.

Extended-period demand was held barred by limitation where the appellant confined the challenge to limitation and did not press the merits of the demand. In light of conflicting co-ordinate Bench views on services rendered to Jammu and Kashmir, the Tribunal accepted that the extended period could not be invoked. The normal-period demand and related interest were left undisturbed because the merits were not further disputed. The penalties were set aside.

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Issues: Whether the demand for the extended period was barred by limitation and whether the penalties could survive when the appeal on merits was not pressed.

Analysis: The Appellant confined the contest to limitation and did not press the merits of the demand. In view of the conflicting co-ordinate Bench decisions on the treatment of services rendered to Jammu and Kashmir, the Tribunal held that the Appellant could not be fastened with the extended-period demand. Since the merits were not disputed further, the demand and interest for the normal period were left undisturbed. The penalties imposed were also set aside.

Conclusion: The demand for the extended period was set aside, the normal-period demand and interest were sustained, and the penalties were set aside.

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