Input credit on steel used in construction allowed; demand also failed on limitation for lack of suppression.

Steel items such as channels, sheets and angles used in construction-related activity at the assessee's premises were treated as eligible inputs for credit, following binding precedent and the department's own allegation of such use in the show-cause notice; credit was therefore allowed on the disputed items. The demand was also largely time-barred because it related to an earlier period, the notice did not allege suppression or misstatement with intent to evade duty, and the credit had been reflected in statutory records, so the extended limitation period could not be invoked. Only the unchallenged transformer oil credit remained confirmed.

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Issues: (i) Whether steel items such as channels, sheets and angles used in civil construction activity at the assessee's premises were eligible for credit as inputs; (ii) Whether the demand was barred by limitation in the absence of suppression or misstatement with intent to evade duty.

Issue (i): Whether steel items such as channels, sheets and angles used in civil construction activity at the assessee's premises were eligible for credit as inputs.

Analysis: The issue was already covered by binding decisions in the assessee's own case and by the Supreme Court, holding that steel items used in construction-related activity could satisfy the eligibility criteria for credit under the then applicable credit scheme. The objection that the assessee had not produced separate documentary proof was rejected because the show-cause notice itself proceeded on the basis that the goods were used in construction activity.

Conclusion: The assessee was entitled to credit on the disputed steel items.

Issue (ii): Whether the demand was barred by limitation in the absence of suppression or misstatement with intent to evade duty.

Analysis: The demand related to an earlier period and was issued after the normal limitation period. The notice did not allege suppression or misstatement with intent to evade duty, and the credit had been recorded in statutory records. In these circumstances, the extended period was not available.

Conclusion: The demand was largely barred by limitation.

Final Conclusion: The impugned orders were set aside substantially and the appeal succeeded on the principal dispute, with only the unchallenged transformer oil credit remaining confirmed.

Ratio Decidendi: Where the department itself alleges a particular use of goods in the show-cause notice and binding precedent treats such goods as eligible for credit, and where no suppression or intent to evade is shown, credit cannot be denied and the extended limitation period cannot be invoked.

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