Extended limitation and tax demand require fresh suppression and proper credit for payments, abatements, reconciliation, and reverse charge treatment.

Extended limitation could not be invoked for a later show cause notice where the same subject-matter and similar facts had already been covered in an earlier notice and adjudication; facts already within the department's knowledge could not be treated as suppression for the later period. The demand also could not be sustained without accounting for the assessee's payments, reconciliation data, admissible abatements and reverse charge treatment, especially where the revenue did not displace the claimed tax adjustments or show the reconciliation to be incorrect. The impugned order was set aside on limitation and on merits, while liability for late filing fee remained unaffected to the extent already due.

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Issues: (i) Whether the extended period of limitation could be invoked for the subsequent show cause notice when an earlier notice on the same subject-matter and on similar facts had already been issued and adjudicated. (ii) Whether the demand could be sustained without giving effect to the appellant's payments, reconciliation, abatements and reverse charge treatment.

Issue (i): Whether the extended period of limitation could be invoked for the subsequent show cause notice when an earlier notice on the same subject-matter and on similar facts had already been issued and adjudicated.

Analysis: The earlier proceedings had already examined the same line of activity and the same source material. The earlier notice, based on comparable third-party records, had resulted in relief to the appellant, and the later notice again proceeded on the same foundation. In such circumstances, the ingredients necessary for alleging suppression of facts for the later period were not made out. The principle that facts already within the department's knowledge cannot be re-characterised as suppression for a subsequent notice was applied.

Conclusion: The extended period of limitation was not invocable. This issue was decided in favour of the appellant.

Issue (ii): Whether the demand could be sustained without giving effect to the appellant's payments, reconciliation, abatements and reverse charge treatment.

Analysis: The record showed belated filing of returns and reconciliation data before the adjudication order, along with material indicating that the taxable value had already suffered service tax to the extent of forward-charge services. The department did not establish that the claimed abatements were unavailable or that the reconciliation was incorrect. The appellant's position that certain services were covered by reverse charge was also not effectively displaced. The demand, therefore, could not be confirmed on the basis adopted in the order-in-original.

Conclusion: The demand was unsustainable on merits as well. This issue was decided in favour of the appellant.

Final Conclusion: The impugned order was set aside and the appeal was allowed on limitation as well as on merits, while the liability for late filing fee remained unaffected to the extent already due.

Ratio Decidendi: Where a later demand for the same subject-matter is founded on facts already known to the department from an earlier proceeding, the extended period of limitation cannot be invoked, and a demand cannot be sustained unless the revenue accounts for the assessee's actual tax payments, admissible abatements and reverse charge treatment.

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