Extended limitation in service tax disputes requires proof of suppression or fraud; interpretational issues with regular disclosures defeat it.

Extended limitation for service tax cannot be invoked absent cogent evidence of suppression, wilful misstatement, fraud, or deliberate withholding of facts, particularly where the dispute is interpretational and the assessee maintained audited books and filed returns. Here, construction of a mechanised fertiliser handling and bagging facility in the port backup area was treated as a port-related activity, and the record did not show any positive act of evasion. The demand was therefore barred by limitation, and the service tax demand and impugned order were set aside with consequential relief.

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Issues: Whether the extended period of limitation could be invoked for demanding service tax on construction of a mechanised fertiliser handling and bagging facility at the port backup area.

Analysis: The facility was constructed at berth No. 6 and its backup area in the Kakinada Deepwater Port under arrangements intended to enhance port capacity and cargo handling. The appellant was registered, maintained audited books, filed returns, and did not charge or collect service tax because it understood the activity to be exempt as port-related construction. The record did not disclose any positive act of suppression, wilful misstatement, fraud, or deliberate withholding of information. The issue was held to be interpretational, and the department had not established sufficient material to justify invocation of the extended limitation period.

Conclusion: The extended period of limitation was not invocable and the demand was barred by limitation.

Final Conclusion: The service tax demand and the impugned order could not be sustained, and the appeals succeeded with consequential relief.

Ratio Decidendi: Extended limitation cannot be invoked in the absence of cogent evidence of suppression, wilful misstatement, fraud, or deliberate evasion, particularly where the dispute is interpretational and the assessee has maintained regular records and disclosures.

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