Limitation barred denial of credit where the extended period could not be invoked on the facts

Denial of credit was held to be barred by limitation because the show cause notice invoked the extended period without a valid basis. The text notes that similarly placed assessees had been granted credit and the Revenue had itself taken divergent stands by filing appeals against those orders, so the extended period could not be applied. As the demand was raised beyond the normal limitation period on that basis, it was time-barred and the appeal was allowed.

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Issues: Whether denial of credit was barred by limitation when the show cause notice invoked the extended period.

Analysis: The appellant's case related to a period for which similarly placed assessees had been granted credit, while the Revenue itself had taken divergent stands by filing appeals against such orders. In that situation, the extended period of limitation could not be invoked. Since the show cause notice was issued by invoking the extended period, the demand was time-barred.

Conclusion: The denial of credit was held to be barred by limitation and the appeal was allowed.

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