Denial of credit based on outdated regulation time-barred, appellant entitled to credit under new rule

The Tribunal held that the denial of credit to the appellant based on Notification No.02/14-CE (N.T.) was time-barred as the extended period of limitation was deemed inapplicable. The show cause notice issued after the extended period was considered invalid, and the appellant was entitled to credit under Notification No.01/10-CE. The impugned order denying credit was set aside, and the appeal was allowed with any necessary consequential relief.

---

---

Issues: Denial of credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014 and the applicability of the extended period of limitation for issuing the show cause notice.

Analysis:
1. The appellant, located in Jammu & Kashmir, appealed against the denial of credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014, claiming they were entitled to credit under Notification No.01/10-CE dt.6.2.2010.

2. The Revenue argued that during 01.06.2012 to 19.01.2014, the appellant could not avail credit against inputs issued by units under exemption. The show cause notice was issued on 30.06.2017, invoking the extended period of limitation.

3. The appellant's counsel cited the case of Dharampal Satyapal Limited vs. CCE, Noida-2017, to support the appellant's right to credit on inputs during the mentioned period.

4. The Authorized Representative reiterated the Commissioner (Appeals)' findings and highlighted that appeals were filed by Revenue against similarly placed assessees in Jammu & Kashmir who were allowed credit.

5. The Tribunal noted the divergence in Revenue's views on allowing credit to similarly placed assessees, leading to the conclusion that the extended period of limitation was inapplicable. As the show cause notice was issued under the extended period, the denial of credit was held to be time-barred.

6. Consequently, the impugned order denying credit was set aside, and the appeal was allowed with any consequential relief deemed necessary.

---