Extended limitation cannot apply where Revenue's own divergent views show the credit dispute was debatable and time-barred.

In a limitation dispute over denial of Cenvat credit, the Tribunal noted that the assessee in Jammu and Kashmir had availed credit during 2011-12 to 2013-14 against the background of Notification No. 02/14-CE (N.T.) and the earlier exemption Notification No. 01/10-CE. Because similarly placed assessees had been allowed credit and the Revenue itself had taken divergent positions by filing appeals against such orders, the issue was not free from doubt. On that basis, the extended period of limitation could not be invoked, the demand was time-barred, and the denial of credit was set aside.

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Issues: Whether the denial of credit was barred by limitation where the show cause notice invoked the extended period of limitation despite divergent views of the Revenue on the issue.

Analysis: The appellant was located in Jammu and Kashmir and had availed credit on inputs during the period 2011-12 to 2013-14. The dispute arose from the effect of Notification No. 02/14-CE (N.T.) dated 20.01.2014 and the earlier exemption Notification No. 01/10-CE dated 06.02.2010. The record showed that similarly placed assessees had been allowed credit, while the Revenue had challenged such orders in appeal. In that situation, the issue was not free from dispute and the existence of divergent views by the Revenue showed that the matter could not be treated as fit for invocation of the extended period.

Conclusion: The extended period of limitation was not applicable and the denial of credit was barred by limitation.

Final Conclusion: The impugned order was set aside and the assessee's entitlement to relief followed from the finding that the demand itself was time-barred.

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