2021 (12) TMI 333 - AT - Central Excise

CENVAT Credit - credit denied on the premise as per N/N. 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 - extended period of limitation - HELD THAT - It is found 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, therefore, the denial of credit is barred by limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of credit to the appellant based on Notification No.02/14-CE (N.T.) and Notification No.01/10-CE.
2. Applicability of the extended period of limitation for issuing show cause notice.
3. Divergent views of the Revenue on allowing credit to similarly placed assessees.

Analysis:
1. The appellant appealed against the denial of credit, citing Notification No.02/14-CE (N.T.) and Notification No.01/10-CE as the basis for the denial. The Revenue contended that during the relevant period, the appellant was not entitled to credit against inputs issued by units availing exemption under Notification No.01/10-CE. The Tribunal noted that the appellant was located in Jammu & Kashmir and availed the benefit of exemption under Notification No.01/10-CE. However, after the introduction of Notification No.02/14-CE (N.T.), the appellant's credit was denied. The Tribunal found that similarly placed assessees were allowed credit, leading to divergent views within the Revenue.

2. The appellant argued that the show cause notice issued on 2.11.2017, invoking the extended period of limitation, was beyond the period involved (1.10.2012 to 19.1.2014). Citing a case precedent, the appellant claimed entitlement to credit on the inputs. The Revenue, represented by the Authorized Representative, supported the findings of the Commissioner (Appeals) and mentioned that appeals had been filed in cases where credit was allowed to assessees in Jammu & Kashmir.

3. After hearing both parties, the Tribunal held that when the Revenue holds divergent views on allowing credit to similarly placed assessees, the extended period of limitation for issuing show cause notices is not applicable. Given that the show cause notice in this case was issued invoking the extended period of limitation, the Tribunal concluded that the denial of credit was barred by limitation. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed necessary.