Refund of cenvat credit reversed under protest follows when the department never appropriates the amount.

A reversal of cenvat credit made under protest remained a deposit because the department never appropriated it under Rule 233B of the Central Excise Rules, 1944. On that basis, refund was permissible, and the earlier reversal did not lose its deposit character. The analysis also noted that cenvat credit on inputs and capital goods used in mines by a cement manufacturer was recognised as admissible under binding precedent, while the contrary decision relied on was distinguishable because appropriation had already taken place there. The assessee was therefore entitled to refund of the amount reversed under protest.

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Issues: Whether the assessee was entitled to refund of cenvat credit reversed under protest when the amount was never appropriated by the department.

Analysis: The reversal made under protest was not appropriated by any authority at any stage. In the absence of appropriation under Rule 233B of the Central Excise Rules, 1944, the amount continued to retain the character of a deposit with the department. The credit reversal was also found unnecessary in view of the binding decision recognizing eligibility of cenvat credit on inputs and capital goods used in mines by a cement manufacturer. The relied-on contrary decision was distinguished because, in that case, the amount had already been appropriated.

Conclusion: The assessee was entitled to refund of the amount reversed under protest.

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