Extended limitation in service tax demands requires proof of deliberate suppression; absent that, the notice is time-barred.

Extended limitation under service tax law applies only where the Revenue proves fraud, collusion, wilful misstatement, suppression of facts or other deliberate evasion; absent such material, the normal limitation period governs and the demand is time-barred. On the facts, no positive act of suppression or intent to evade was shown, and the notice was issued beyond even the extended period calculated from the relevant date for an unregistered assessee who filed no return. As the demand failed on limitation, the proposed classification as real estate agent service was not examined further, and the consequential interest and penalty could not stand because the foundational demand itself was unsustainable.

---

---

Issues: (i) Whether the demand of service tax was barred by limitation. (ii) Whether, if the demand was not time-barred, the confirmation of demand, interest and penalty for alleged real estate agent service was sustainable.

Issue (i): Whether the demand of service tax was barred by limitation.

Analysis: Section 73(1) of the Finance Act, 1994 permitted recovery within one year from the relevant date, and the proviso extended the period to five years only where non-payment was attributable to fraud, collusion, wilful misstatement, suppression of facts, or contravention of the law with intent to evade tax. Section 73(6) fixed the relevant date, and where no return was filed and the assessee was unregistered, the governing date was the date on which the tax was payable under the rules. The record did not disclose any positive act of suppression or deliberate evasion; the notice was issued long after the expiry of even the extended period computed from the date when tax was due. The Revenue also failed to establish material justifying invocation of the extended period.

Conclusion: The demand was time-barred and the extended period could not be invoked.

Issue (ii): Whether, if the demand was not time-barred, the confirmation of demand, interest and penalty for alleged real estate agent service was sustainable.

Analysis: Once the demand was found to be barred by limitation, the merits of classification and taxability did not survive for adjudication. The consequential levy of interest and penalty under Section 78 of the Finance Act, 1994 also could not stand when the foundational demand itself was unsustainable.

Conclusion: The confirmation of demand, interest and penalty was unsustainable.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and consequential relief followed in law.

Ratio Decidendi: The extended limitation under service tax law can be invoked only on proof of deliberate suppression or other specified culpable conduct with intent to evade tax, and absent such proof the notice is barred by limitation.

---