ORDER
T. Anjaneyulu, Member (J)
1. Heard both sides.
2. The issue involved is refund of Cenvat Credit already availed by the appellant on the stock of LDO lying as such within the factory premises as on 28-2-2003. The appellant was directed to reverse such credit by the Department vide its letter dated 16-4-2003, in terms of C.B.E.C. Circular dated 31-3-2003. The appellant reversed the said credit. However, while intimating the facts of such reversion vide their letter dated 23-4-03, did not clearly mention the fact that such credit was being reversed under protest. The Hon’ble Karnataka High Court quashed the said circular dated 31-3-03 as the same was contrary to law, which view was upheld by the Hon’ble Supreme Court as reported in 2004 (170) E.L.T. A306.
3. This is the finding of both the lower authorities that it was only upon such order of the higher forums that the appellant preferred the refund claim of the credit originally reversed. It is a stand of the adjudicating authority that the ‘protest’ has not been made in the prescribed manner as provided under chapter 13(8), para 4.2 of Central Excise Manual. In this regard I am to observe that the procedure laid down under the said chapter pertaining to the payment of duty and preparation of invoices monthly and quarterly Returns etc. Also giving information to the Supdt. or Inspector of Central Excise giving reasons for paying duty under protest. In the instant case, it is not the payment of duty but simply reversal of the credit obeying the Board’s circular. A person who has effected reversal of credit following the Board Circular, cannot be dubbed by saying that the reversal was voluntary one. Surprisingly, the lower appellate authority thought after the judgment of the Apex Court, the assessee is making a refund claim by effecting voluntary reversal. In my considered opinion, the views expressed by both the authorities are erroneous and does not stand in view of the following decisions:
Indo-Nippon Chemicals Co. Ltd. v. Union of India
wherein it is laid down that the limitation begins to run from discovery of mistake. The appellants contention is that after the judgment of the Apex Court and realizing the mistake that the reversal was wrongly effected, though under protest, the same could be claimed back. In this context, it is to be observed that the appellant following the Board Circular has effected the reversal under protest. This aspect has not been looked by both the authorities.
4. The next question comes up for consideration is whether the case is barred by limitation. In my view the claim is not at all barred by limitation since the Apex Court held that Board Circular is not legal of two years as such the situation became scat us quo ante as on 28-2-03. Though the litigation prolonged for a period of two years, the fact remains that circular was deemed to have been set aside on the same day when it was issued. Even otherwise, the period spent in the litigation is required to be safeguarded and eliminated from running out of limitation. In any case, the claim being made within one year from the date of order of the Hon’ble Apex Court, in terms of the ratio of the Hon’ble Gujarat High Court in the case of Indo-Nippon (Supra), the claim is within lime and not barred by limitation. Thus, the impugned order is set aside. In the result, the appeal is allowed with consequential relief, if any, to the appellant.
(Pronounced in the Court)