Service Tax Recovery Case: Extended Limitation Invalid Without Proof of Willful Suppression Under Section 73(1)

The CESTAT ruled in favor of the appellant regarding service tax recovery for 2011-2012. The demand for April-September 2011 was time-barred, exceeding even the extended five-year limitation period under Section 73(1) of the Finance Act. For October 2011-March 2012, the Tribunal found insufficient grounds to invoke extended limitation, following SC precedent that suppression of facts must be willful and demonstrate clear intent to evade tax. The court emphasized that mere suppression alone is insufficient - it must be deliberate and accompanied by intent to evade payment, similar to other serious infractions like fraud or collusion. The service tax demands for both periods were invalidated and the appeal was allowed. .....

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