Extended limitation for security agency service tax applies where partial tax payment demonstrates intent to evade liability.

Non-payment of service tax on part of the consideration received for taxable security agency services may justify extended limitation and penalty where the conduct shows intent to evade tax. The notes state that partial payment during the same financial year negated the claimed bona fide belief that a welfare-oriented cooperative society was exempt from service-tax liability. Its bye-laws contemplated net profit, and cooperative status did not distinguish it from a commercial entity. Service tax was payable on the gross amount received under Section 67 of the Finance Act, 1994; accordingly, the extended recovery period, tax demand, and penalty were considered sustainable.

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Issues: Whether the extended period of limitation for recovery of service tax on security agency services was validly invoked and whether penalty was sustainable.

Analysis: The appellant accepted receipt of consideration for taxable security agency services and had paid service tax on only part of the receipts during the same financial year. This conduct negatived the asserted bona fide belief that, as a welfare-oriented cooperative society, it had no service-tax liability. Its bye-laws also contemplated net profit, and its cooperative character did not distinguish it from a commercial entity for this purpose. Tax was payable on the gross amount received for the taxable service under Section 67 of the Finance Act, 1994. The non-payment of tax on the balance receipts was found to evince an intent to evade payment, justifying invocation of the extended limitation period and imposition of penalty.

Conclusion: The extended period was validly invoked, and the service-tax demand and penalty were sustainable against the assessee.

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