Exemption for roads used by the public bars CENVAT credit, while extended limitation fails absent suppression.

CENVAT credit on input services used to construct roads inside an industrial park was held inadmissible because the roads were treated, on the facts, as falling within the exemption for roads used by the general public under Notification No. 25/2012-ST. The text further states that extended limitation could not be invoked, as the dispute arose from a bona fide interpretative view and the record did not show suppression or wilful misstatement with intent to evade. Consequently, the demand was confined to the normal period, with credit, interest, penalty and refund consequences to be recalculated on remand.

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Issues: (i) Whether CENVAT credit was admissible on input services used for construction of roads inside the industrial park in view of the exemption for roads used by general public under Notification No. 25/2012-ST. (ii) Whether the extended period of limitation could be invoked on the ground of suppression or wilful misstatement.

Issue (i): Whether CENVAT credit was admissible on input services used for construction of roads inside the industrial park in view of the exemption for roads used by general public under Notification No. 25/2012-ST.

Analysis: The roads were constructed within the industrial park, but the layout and surrounding connectivity showed that they formed part of the larger road network and were not confined to restricted private use. The exemption under the notification applies to construction of roads for use by the general public, and once the roads are treated as exempt services, credit of tax paid on inputs/input services used for such construction is barred under the CENVAT Credit Rules.

Conclusion: The roads fell within the exemption for roads used by general public, and the denial of CENVAT credit on that basis was upheld.

Issue (ii): Whether the extended period of limitation could be invoked on the ground of suppression or wilful misstatement.

Analysis: The dispute turned on interpretation of the exemption entry and the nature of the roads. The appellant's position was founded on a bona fide understanding that the roads were for private industrial use, and the record did not establish suppression with intent to evade. The matter was therefore revenue neutral and did not justify invocation of the extended limitation period.

Conclusion: The extended period of limitation was not available, and the demand was confined to the normal period only.

Final Conclusion: The finding on merits in favour of exemption was maintained, but the demand could survive only for the normal period, with consequential recalculation of credit, interest, penalty, and refund consequences on remand.

Ratio Decidendi: A road constructed within a private development is covered by the exemption if, on the facts, it is meant for use by the general public and not confined to restricted private access; in a revenue-neutral, interpretative dispute, extended limitation cannot be invoked absent proof of suppression with intent to evade.

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