Limitation under service tax law barred the demand where suppression with intent to evade was not established.

Under Section 73(1) of the Finance Act, 1994, the normal limitation period applied, and the extended period could be used only on proof of fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax. On the record, the assessee was registered, filed ST-3 returns, and had been subject to audit and departmental correspondence, so deliberate suppression with intent to evade service tax was not established. The extended period was therefore not invocable, and the demand was barred by limitation. As limitation was ative, the merits of the credit and exemption dispute were left unexamined as inconsequential.

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Issues: Whether the demand was barred by limitation and, if so, whether the merits of the credit and exemption dispute required examination.

Analysis: The period of limitation under Section 73(1) of the Finance Act, 1994 applies as the normal rule, and the extended period can be invoked only where the non-payment is shown to arise from fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax. The relevant date under Section 73(6) of the Finance Act, 1994 was to be computed from the filed returns, and the record showed that the appellant was registered, filing ST-3 returns, and had been subjected to audit and departmental correspondence during the relevant period. In such circumstances, the record did not establish a deliberate suppression of facts with intent to evade service tax, and mere non-disclosure in the manner alleged could not justify invocation of the extended period.

Conclusion: The extended period of limitation was not invocable, and the demand was barred by limitation. The merits of the credit and exemption dispute were not examined as they had become inconsequential.

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