Third-party data alone cannot sustain extended limitation or tax classification without corroborative evidence in service tax matters.

Service tax demand based solely on third-party income-tax data, without independent verification or corroborative evidence, could not justify invocation of the extended period on alleged suppression of facts. The Tribunal also found that the transport activity was not established as Goods Transport Agency service and there was no tangible evidence for the alternative classification advanced by Revenue; the record indicated coverage by the negative list and the pleaded exemption. The appellate order was set aside and the original dropping of proceedings was restored.

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Issues: (i) Whether a service tax demand based only on third-party data, without independent verification and corroborative evidence, could sustain invocation of the extended period of limitation on the allegation of suppression of facts; (ii) Whether the appellant's transport activity was taxable as a Goods Transport Agency service or as a declared service, or was covered by the negative list and the exemption pleaded in the proceedings.

Issue (i): Whether a service tax demand based only on third-party data, without independent verification and corroborative evidence, could sustain invocation of the extended period of limitation on the allegation of suppression of facts.

Analysis: The demand originated from third-party information obtained from income-tax records. The record did not show any meaningful investigation to verify the factual position independently. In the absence of corroborative material, mere reliance on such data was insufficient to conclude suppression of facts or to justify the larger period of limitation.

Conclusion: The invocation of the extended period of limitation was not sustainable and the issue was decided in favour of the assessee.

Issue (ii): Whether the appellant's transport activity was taxable as a Goods Transport Agency service or as a declared service, or was covered by the negative list and the exemption pleaded in the proceedings.

Analysis: The Tribunal accepted that the appellant was not a Goods Transport Agency and was not required to issue consignment notes. It also found no tangible evidence to support the revised classification suggested in appeal. The activity was treated as falling within the negative list, and the exemption under the relevant notification was also noticed in the record. The appellate order had not dealt with these aspects properly and the attempt to levy tax under a different head was unsupported by the facts.

Conclusion: The appellant's activity was held not liable to service tax on the basis adopted by the Revenue, and the issue was decided in favour of the assessee.

Final Conclusion: The appellate authority's order was set aside, the original adjudication dropping the proceedings was restored, and the appellant obtained full relief in the tax dispute.

Ratio Decidendi: A service tax demand cannot be sustained on unverified third-party information alone, and where the Revenue fails to establish the taxable classification with tangible evidence, extended limitation and levy under an alternative head are not maintainable.

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