Extended limitation under the proviso to Section 73(1) requires positive evidence of fraud or concealment; absent that, demands are time barred.

Invocation of the proviso to Section 73(1) to extend the limitation period was rejected because there were no specific allegations or evidence of fraud, collusion, wilful misstatement or deliberate suppression of facts; the appellant possessed a bona fide belief that Notification No.30/2012-ST shifted service tax liability to the service recipient for rent-a-cab services, and absence of ST-3 filings or non-payment alone does not satisfy the positive-evidence requirement to trigger extended limitation. Consequently, the extended-period demand, interest and penalties were held time-barred and set aside in favour of the assessee.

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Issues: Whether the demand for service tax for the financial year 2014-15 could be sustained by invoking the proviso to Section 73(1) of the Finance Act, 1994 (extended period of limitation) when the appellant had a bona fide belief that the service tax liability was on the service recipient under Notification No.30/2012-ST and where there was no finding of fraud, collusion, wilful misstatement or suppression of facts.

Analysis: The impugned orders relied on Income Tax data and absence/incompleteness of ST-3 returns to invoke the proviso to Section 73(1) of the Finance Act, 1994 and demand tax, interest and penalties. The material shows the appellant was registered and provided services characterized as rent-a-cab; Notification No.30/2012-ST placed liability on the service recipient for such services, giving rise to a plausible and reasonable belief that the recipient bore the tax liability. The record does not contain specific averments in the show-cause notice alleging fraud, collusion, wilful misstatement or deliberate suppression of facts with intent to evade tax, nor is there documentary evidence establishing transfer of possession and control of vehicles or positive acts of concealment by the appellant. Established precedents require positive evidence of mala fide conduct to invoke the extended limitation period; mere non-payment or filing deficiencies do not suffice. Given the absence of specific allegations and proof of intent to evade, invocation of the extended period was legally impermissible and the resultant demand is time-barred.

Conclusion: The invocation of the proviso to Section 73(1) of the Finance Act, 1994 to extend the period of limitation is not sustainable; the appellant's appeal is allowed and the demand made under the extended period is set aside in favour of the assessee.

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