Extended limitation cannot sustain service tax demand where works contract records are already in the public domain.

Extended limitation could not be invoked for service tax demands on works contract services rendered to Government departments where the activity and supporting records were already in the public domain and the notice was based on third-party information. Because the show cause notice covered a period beyond the normal limitation and depended on the extended period, the demand for the disputed period was held unsustainable. The penalty also failed once the demand was time-barred.

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Issues: Whether the extended period of limitation could be invoked for demanding service tax on works contract services rendered to Government departments, and whether the demand and penalty could be sustained once the notice was held time-barred.

Analysis: The appeal turned on limitation. The services were stated to have been rendered for Government departments and the demand had been raised on the basis of third-party information. The Tribunal followed its earlier view that, on similar facts, where the activity and supporting documents were in the public domain, the extended period was not available. Since the show cause notice covered a period beyond the normal limitation and was founded on the extended period, the demand for the entire disputed period could not survive.

Conclusion: The extended period of limitation was not invokable. The demand and penalty were set aside, and the assessee succeeded on limitation.

Ratio Decidendi: Where the department relies on extended limitation for a demand arising from transactions and records already in the public domain, and the notice is issued beyond the normal period, the demand for the covered period is not sustainable.

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