Duty paid under protest excludes refund limitation, and captive-consumption credit cannot be denied because an intermediate product emerges.

Duty paid under protest was held outside the six-month refund bar, as the protest had been communicated to the department and no separate six-month period ran from disposal of the protest. The refund claim filed shortly after the departmental communication was therefore not time-barred. On merits, captive-consumption relief was available for acetic anhydride, and credit under Rule 56A could also be granted even though the claim was made subsequently. The emergence of an intermediate product did not defeat either the exemption or the credit benefit, so the rejection of refund relief could not stand.

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Issues: (i) whether the refund claim was barred by limitation despite payment of duty under protest; and (ii) whether the assessee was entitled to exemption or credit benefit under the excise rules for captively consumed acetic anhydride.

Issue (i): whether the refund claim was barred by limitation despite payment of duty under protest

Analysis: The payment of duty had been made under protest and the protest was communicated to the department. Section 11B excludes the six-month limitation where duty has been paid under protest, and neither that provision nor Rule 233B prescribes a six-month period from the date of disposal of the protest. In the circumstances, only a reasonable period for filing the refund claim could apply, and the claim filed shortly after the departmental communication could not be treated as time-barred.

Conclusion: The refund claim was not barred by limitation.

Issue (ii): whether the assessee was entitled to exemption or credit benefit under the excise rules for captively consumed acetic anhydride

Analysis: The claim was sustainable both as a captive-consumption exemption claim under the excise rules and as a credit claim under Rule 56A. The emergence of an intermediate product did not defeat the benefit, and credit could be granted even when claimed subsequently. The lower authorities' view that the benefit was unavailable was therefore not sustainable.

Conclusion: The assessee was entitled to the credit benefit and the corresponding refund relief.

Final Conclusion: The impugned rejection could not stand, and the assessee succeeded on both limitation and merits, with entitlement to credit equivalent to the duty paid on the acetic anhydride.

Ratio Decidendi: Where duty is paid under protest, the six-month limitation in refund matters does not apply, and captive consumption benefits or credit cannot be denied merely because an intermediate product emerges in the manufacturing process.

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