Extended limitation for service tax cannot apply without suppression or wilful evasion where exemption and non-taxability are supported.

Extended period of limitation for service tax could not be invoked where the assessee produced breakup of receipts and supporting records showing both sale of goods and composite installation-related activity, and where those materials supported the claim that the taxable service value remained within the threshold exemption under Notification No. 33/2012-Service Tax. The demand failed because the assessee's conduct reflected a bona fide belief that no service tax was payable, and the record did not show wilful suppression or intent to evade tax. As a result, the demand for service tax, interest and penalties was held unsustainable.

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Issues: Whether the demand of service tax, interest and penalties could be sustained by invoking the extended period of limitation when the assessee claimed threshold exemption and asserted that its receipts largely related to sale of goods and composite work.

Analysis: The record showed that the assessee had furnished breakup of receipts and supporting documents indicating both sale of goods and provision of services. The appeal also addressed the nature of the transactions, including invoices showing supply along with installation activity, and the assessee relied on the threshold exemption under Notification No. 33/2012-Service Tax dated 20.06.2012. The finding of the lower authorities that the exemption was unavailable was held unsustainable because the assessee had substantially demonstrated that the aggregate taxable service value was within the exemption limit and had acted under a bona fide belief that no service tax was payable. On limitation, the demand could not survive once there was no material showing wilful default or suppression sufficient to justify the extended period.

Conclusion: The extended period of limitation was not invocable and the demand, interest and penalties could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal was allowed.

Ratio Decidendi: Extended limitation for service tax cannot be invoked in the absence of specific material showing suppression or wilful intent to evade, particularly where the assessee's conduct reflects a bona fide belief and the surrounding records support exemption or non-taxability.

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