Tribunal grants appellant credit entitlement against inputs, citing Notification No. 01/10-CE

The Tribunal ruled in favor of the appellant, setting aside the denial of credit based on Notification No.02/14-CE (N.T.) and allowing the appeal for credit entitlement against inputs under Notification No.01/10-CE. The Tribunal found the denial of credit to be time-barred due to the extended period of limitation invoked for the show cause notice, considering conflicting views within the Revenue on similar cases. The appellant's argument regarding credit availability for inputs during the specified period was supported by a precedent, leading to the decision in favor of the appellant with possible consequential relief.

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Issues:
1. Denial of credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014
2. Entitlement to credit against inputs under Notification No.01/10-CE dt.6.2.2010
3. Invocation of extended period of limitation for issuing show cause notice

Analysis:

1. The appellant contested 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. The appellant, located in Jammu & Kashmir, availed exemption under Notification No.01/10-CE dt.6.2.2010 but faced credit denial for duty paid on inputs during 2011-12 to 2013-14. The Revenue argued that credit was disallowed for inputs issued by exempted units until the amendment in Notification No.01/10-CE dt.6.2.2010 through Notification No.02/14-CE (N.T.) dt.20.1.2014. The Tribunal noted divergent views within the Revenue on similar cases, leading to the conclusion that the denial of credit was time-barred due to the extended period of limitation invoked for the show cause notice.

2. The appellant highlighted the issuance of the show cause notice in 2016 for the period 2011-12 to 2013-14, invoking the extended period of limitation. Citing a precedent (Dharampal Satyapal Limited vs. CCE, Noida-2017), the appellant argued for credit entitlement on inputs. The Tribunal acknowledged the appellant's argument regarding the limitation period and the precedent supporting credit availability for inputs under similar circumstances. The Tribunal's decision favored the appellant, setting aside the impugned order and allowing the appeal with possible consequential relief.

3. The Tribunal considered the arguments presented by both parties and examined the conflicting views within the Revenue on similar cases involving credit entitlement. Given the invocation of the extended period of limitation for the show cause notice issued beyond the normal timeframe, the Tribunal concluded that the denial of credit was not valid due to being time-barred. This decision was based on the principle that divergent views within the Revenue on the issue precluded the application of the extended limitation period, leading to the allowance of the appeal and potential consequential relief for the appellant.

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