Extended limitation for credit denial not available where similar assessees received credit and Revenue had filed appeals.

Denial of credit could not be sustained where the show cause notice was issued by invoking the extended period of limitation after the disputed period had already run. The record showed that similarly placed assessees had been allowed credit and that the Revenue had itself challenged those orders, reflecting a divergence of views on the issue. In those circumstances, the extended limitation period was not available, and the credit denial was held to be barred by limitation.

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Issues: Whether denial of credit was sustainable when the show cause notice was issued by invoking the extended period of limitation.

Analysis: The period in dispute was 2011-12 to 2013-14, while the show cause notice was issued on 30.03.2016 by invoking the extended period. The record showed that similarly placed assessees had been allowed credit and that the Revenue itself had filed appeals against those orders, indicating divergence of views on the issue. In such circumstances, the extended period could not be invoked.

Conclusion: The denial of credit was barred by limitation and could not be sustained.

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