Extended limitation for Cenvat credit denial fails where the issue was disputed and Revenue held divergent views.

Denial of Cenvat credit was held to be barred by limitation because the show cause notice relied on the extended period despite the issue being contentious and not free from doubt. The record showed that similarly placed assessees had been granted credit and the Revenue had taken divergent stands, including filing appeals against favourable orders. In these circumstances, invocation of the extended period was not justified, and the credit denial could not be sustained against the assessee.

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

Analysis: The dispute related to credit availed during the relevant period before the amendment brought in by Notification No. 02/14-CE (N.T.) dated 20.01.2014. The record showed that similarly placed assessees had been allowed credit, while the Revenue had taken divergent positions and filed appeals against favourable orders. In such circumstances, the issue was not free from controversy, and the invocation of the extended period could not be sustained.

Conclusion: The denial of credit was held to be barred by limitation and could not be sustained against the assessee.

Final Conclusion: The impugned denial of credit was set aside and the appeals were allowed with consequential relief.

Ratio Decidendi: Where the Revenue itself maintains divergent views on a disputed issue and similarly placed assessees have been granted relief, invocation of the extended period of limitation is not justified.

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