Limitation for CENVAT credit recovery: notices issued beyond the normal period without invoking extended time were time-barred.

Recovery of irregularly availed CENVAT credit must be pursued under Section 11A of the Central Excise Act, 1944 read with Rule 14 of the CENVAT Credit Rules, 2004, and the normal limitation period under Section 11A(1) applies unless the extended period is specifically invoked on allegations of fraud, collusion, wilful suppression, misstatement, or similar intent to evade duty. Because the show-cause notices were issued beyond the normal period without such invocation or supporting allegations, the demand for credit recovery, together with interest and penalty, was held time-barred and unsustainable.

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Issues: Whether the show-cause notices issued for recovery of irregularly availed CENVAT credit, interest, and penalties were barred by limitation for having been issued beyond the normal period without invocation of the extended period.

Analysis: The demand proceedings were initiated under Section 11A of the Central Excise Act, 1944, and Rule 14 of the CENVAT Credit Rules, 2004. Recovery of wrongly taken CENVAT credit had to follow the procedure under Section 11A, including the normal limitation period prescribed under Section 11A(1). The extended period could be invoked only where the notice alleged and established fraud, collusion, wilful suppression, misstatement, or contravention with intent to evade duty. The notices in question were issued beyond the normal period and did not invoke the extended period on any such grounds. The demand was therefore hit by limitation.

Conclusion: The demand, interest, and penalty proceedings were time-barred and could not be sustained.

Ratio Decidendi: A demand for recovery of irregularly taken CENVAT credit must be initiated within the normal limitation period under Section 11A of the Central Excise Act, 1944 unless the extended period is specifically invoked and justified by the requisite allegations of fraud, suppression, misstatement, or similar intent to evade duty.

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