2022 (1) TMI 966 - AT - Central Excise

CENVAT Credit - credit denied on the premise as per Notification No.02/14-CE (N.T.) dt.20.1.2014, the appellant was not entitled to credit prior to the N/N. 01/10-CE dt.6.2.2010 - period involved in this case is 14.8.2012 to 19.1.2014 whereas the show cause notice has been issued on 17.8.2017 - invocation of extended period of limitation - HELD THAT - Similarly placed assessee DHARMPAL SATYAPAL LTD. VERSUS COMMISSIONER OF C. EX., NOIDA 2016 (9) TMI 1389 - CESTAT ALLAHABAD 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, therefore, the denial of credit is barred by limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014; Applicability of extended period of limitation for issuing show cause notice.

Analysis:
1. The appellant appealed against the denial of credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014, which restricted credit entitlement before Notification No.01/10-CE dt.6.2.2010.

2. The appellant, located in Jammu & Kashmir, availed exemption under Notification No.01/10-CE dt.6.2.2010, procured inputs, and claimed duty credit. Revenue contended that during 14.8.2012 to 19.1.2014, credit was not allowable for inputs from exempt units until Notification No.02/14-CE (N.T.) dt.20.1.2014 amended the prior notification.

3. The appellant argued that the show cause notice issued on 17.8.2017, invoking extended limitation, exceeded the period from 14.8.2012 to 19.1.2014. Citing a precedent, the appellant claimed entitlement to credit on inputs.

4. The Authorized Representative supported the Commissioner (Appeals) findings, noting appeals by Revenue against similar cases in Jammu & Kashmir where credit was allowed.

5. After hearing both parties, the Tribunal observed divergent views on credit allowance for similarly situated assesses, leading to Revenue appeals. Given the invoked extended limitation for the show cause notice, the Tribunal ruled the denial of credit as time-barred. Consequently, the impugned order was overturned, allowing the appeal with possible consequential relief.