Extended limitation cannot be invoked for interpretational disputes where revenue neutrality and prior deposit negate suppression.

The extended period of limitation could not be invoked where the demand turned on interpretational issues, a substantial part of the demand was revenue neutral because service tax paid in cash on GTA services would have been available as Cenvat credit, and the audit-related tax amounts had already been deposited before the show cause notice was issued. On those facts, suppression or wilful misstatement was not established, so the notice could not be sustained on the basis of extended limitation.

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Issues: Whether the extended period of limitation could be invoked for issuing the show cause notice.

Analysis: The demand arose from issues that were essentially interpretational. A substantial part of the demand was revenue neutral because service tax paid in cash on GTA services would have been available as Cenvat credit. The tax demands on the audit objections had also been deposited and the objections accepted before issuance of the show cause notice. In such circumstances, the allegation of suppression or wilful misstatement was not made out.

Conclusion: The extended period of limitation was not available to the Revenue, and the show cause notice could not be sustained on that basis.

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