Appellate Tribunal Allows Cenvat Credit Appeal, Time-Barred Denial Set Aside

The Appellate Tribunal CESTAT CHANDIGARH allowed the appeals of the appellants, setting aside the denial of cenvat credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014. The denial was deemed time-barred as the show cause notice was issued under the extended period of limitation, and conflicting views within the Revenue on similar cases in Jammu & Kashmir were noted. The appellants were held entitled to avail credit on inputs prior to Notification No.01/10-CE dt.6.2.2010, leading to the favorable outcome for the appellants.

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Issues:
Denial of cenvet credit based on Notification No.02/14-CE (N.T.) dt.20.1.2014.
Appellant's entitlement to avail credit prior to Notification No.01/10-CE dt.6.2.2010.
Applicability of extended period of limitation for issuing show cause notice.

Analysis:

1. The judgment revolves around the denial of cenvet credit to the appellants based on Notification No.02/14-CE (N.T.) dt.20.1.2014. The appellants were contending that they were entitled to avail credit prior to Notification No.01/10-CE dt.6.2.2010. The case involved the procurement of inputs by the appellants, who were located in Jammu & Kashmir and benefiting from the exemption under Notification No.01/10-CE dt.6.2.2010. The Revenue argued that during the relevant period of 2011-12 to 2013-14, the appellants were not eligible to claim credit against inputs issued by units enjoying the said exemption.

2. The contention of the appellants was supported by the argument that the show cause notice had been issued invoking the extended period of limitation, covering the period from 01.05.2012 to 19.01.2014. Reference was made to a case law, Dharampal Satyapal Limited vs. CCE, Noida-2017 (352) ELT 396 (Tri.-All.), to assert their entitlement to credit on the inputs. On the other hand, the Revenue pointed out that appeals had been filed against similarly placed assessees in Jammu & Kashmir who were allowed credit, indicating divergent views within the Revenue on the issue.

3. The Member (Judicial) analyzed the arguments and observed that when the Revenue holds conflicting views on the same issue, the extended period of limitation cannot be applied. Given that the show cause notice in this case was issued under the extended period of limitation, the denial of credit was deemed to be time-barred. Consequently, the impugned order denying credit was set aside, and the appeals of the appellants were allowed with any consequential relief deemed appropriate.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the reasoning behind the decision rendered by the Appellate Tribunal CESTAT CHANDIGARH.

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