2021 (8) TMI 1060 - AT - Central Excise

CENVAT Credit - denial of credit on the premise as per N/N. 02/14-CE (N.T.) dt.20.1.2014, the appellants were not entitled to avail credit prior to the N/N. 01/10-CE dt.6.2.2010 - extended period of limitation - HELD THAT - Similarly placed assessee was allowed the credit although against those orders, the appeals have been filed by the Revenue before the Commissioner (Appeals), in that circumstance, when the Revenue is having divergent views on the issue, the extended period of limitation is not applicable - Admittedly, in this case, the show cause notice has been issued by invoking the extended period of limitation. The denial of credit is barred by limitation - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of cenvet credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014.
Appellant's entitlement to avail credit prior to Notification No.01/10-CE dt.6.2.2010.
Applicability of extended period of limitation for issuing show cause notice.

Analysis:

1. The judgment revolves around the denial of cenvet credit to the appellants based on Notification No.02/14-CE (N.T.) dt.20.1.2014. The appellants were contending that they were entitled to avail credit prior to Notification No.01/10-CE dt.6.2.2010. The case involved the procurement of inputs by the appellants, who were located in Jammu & Kashmir and benefiting from the exemption under Notification No.01/10-CE dt.6.2.2010. The Revenue argued that during the relevant period of 2011-12 to 2013-14, the appellants were not eligible to claim credit against inputs issued by units enjoying the said exemption.

2. The contention of the appellants was supported by the argument that the show cause notice had been issued invoking the extended period of limitation, covering the period from 01.05.2012 to 19.01.2014. Reference was made to a case law, Dharampal Satyapal Limited vs. CCE, Noida-2017 (352) ELT 396 (Tri.-All.), to assert their entitlement to credit on the inputs. On the other hand, the Revenue pointed out that appeals had been filed against similarly placed assessees in Jammu & Kashmir who were allowed credit, indicating divergent views within the Revenue on the issue.

3. The Member (Judicial) analyzed the arguments and observed that when the Revenue holds conflicting views on the same issue, the extended period of limitation cannot be applied. Given that the show cause notice in this case was issued under the extended period of limitation, the denial of credit was deemed to be time-barred. Consequently, the impugned order denying credit was set aside, and the appeals of the appellants were allowed with any consequential relief deemed appropriate.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the reasoning behind the decision rendered by the Appellate Tribunal CESTAT CHANDIGARH.