Cenvat credit reversal and refund limitation: credit validly taken before exemption need not be reversed, and payment under protest saves refund claim.

Credit validly taken when the final product was dutiable need not be reversed merely because the product later becomes exempt, where no rule requires such reversal and the governing Larger Bench view is followed. A contrary decision was treated as not binding on the facts stated. On limitation, a refund claim was not barred where the duty was paid under protest in terms of Rule 233B of the Central Excise Rules, 1944, and the assessee continuously pursued the matter with the department. The refund, with consequential interest, was held admissible.

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Issues: Whether the appellant was required to reverse credit validly availed when the final product became exempt, and whether the refund claim was barred by limitation despite payment under protest.

Analysis: The credit had been availed during the period when the final product was dutiable, and there was no rule requiring reversal of such legally availed credit merely because the product was later exempted. The issue was governed by the Larger Bench decision in Ashok Iron & Steel Fabrication, which had been upheld, while the contrary view in Albert David did not survive as a binding precedent in the facts of the case. On limitation, the amount had been paid under protest in accordance with Rule 233B of the Central Excise Rules, 1944, and the appellant had continuously pursued the matter with the department; therefore the refund could not be treated as time-barred.

Conclusion: The appellant was not required to reverse the credit, and the refund claim was not hit by limitation. The refund along with consequential interest was held admissible in favour of the assessee.

Ratio Decidendi: Credit validly taken during the dutiable period is not liable to reversal merely because the final product later becomes exempt, and a refund claim arising from payment made under protest cannot be rejected as time-barred where the claim remained under active departmental consideration.

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