Extended limitation requires proven intent to evade tax; audit-based secondment service-tax demand survives only within normal limitation.

Extended limitation for service-tax recovery on employee secondment from overseas affiliates cannot apply without proof of fraud, collusion, wilful misstatement, or wilful suppression intended to evade tax. Divergent judicial views supported a bona fide understanding of the tax position, while the audit-based demand relied on information already available to the department. Recovery was therefore confined to the normal limitation period, and the demand beyond that period was set aside.

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Issues: Whether the extended period of limitation could be invoked for recovery of service tax on manpower supply service received through employee secondment from overseas affiliates.

Analysis: The assessee did not contest taxability on merits and confined the dispute to limitation. The secondment arrangement had been subject to divergent judicial views, supporting a bona fide understanding regarding service-tax liability. The demand also arose from audit-based information already available to the department. In these circumstances, fraud, collusion, wilful misstatement, or wilful suppression with intent to evade tax was not established. The applicable principle permits recovery only for the normal limitation period where the extended period lacks a valid basis.

Conclusion: Invocation of the extended period of limitation was unsustainable; the demand beyond the normal period was set aside in favour of the assessee.

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