Mere audit discovery from books of account does not establish suppression warranting extended limitation.

An audit found that the Appellant had not paid service tax on income from testing, calibration and certification services for October 2007 to January 2009.

A show-cause notice dated 8 September 2010 proposed a demand of ₹27,82,537 under the extended-period proviso to Section 73(1) of the Finance Act, 1994, along with interest and appropriation of amounts already paid.

The Appellant contended that it had paid the tax quantified by the Audit Superintendent, that the computation included services to SEZ units, and that the demand was based on its books and records, without suppression or intent to evade tax.

The adjudicating authority confirmed the demand, and the Commissioner (Appeals) upheld it.

The Appellant appealed to the Tribunal.

1. Whether the Revenue was justified in alleging suppression and invoking the extended period of limitation.

2. Whether the tax demand was sustainable.

Under the proviso to Section 73(1) of the Finance Act, 1994, the extended period may be invoked where the statutory conditions, including suppression with intent to evade payment of tax, are established.

The Tribunal held that suppression must be established by the Revenue; mere non-payment or an allegation of suppression is insufficient to justify the extended period.

It relied on *Padmini Products v. Collector of Central Excise*, 1989 (43) ELT 195 (SC); *Uniworth Textiles Ltd. v. CCE, Raipur*, 2013 (288) ELT 161 (SC); and *CCE v. H.M.M. Ltd.*, 1995 (76) ELT 497 (SC), as supporting the requirement that the basis for invoking the extended period be justified.

The Tribunal noted that the Superintendent’s communication quantifying the liability pre-dated the show-cause notice and that the differential demand had been worked out through an audit and verification of the Appellant’s books and invoices.

The authorities had treated the late payment and the fact that the liability emerged on detailed audit verification as sufficient to infer deliberate suppression.

The Tribunal found that those circumstances did not establish factual suppression with intent to evade tax; the Revenue had not justified invoking the extended period.

Since the notice was issued beyond the normal period, the Tribunal did not separately determine the tax computation on its merits.

It set aside the impugned order and allowed the appeal with consequential benefits, if any, in accordance with law.