Protest in CENVAT reversal can be shown by written reservation of rights, keeping refund claims outside limitation.

A written reservation of the right to reclaim reversed CENVAT credit can amount to protest, even if the words "under protest" are not used, where the debit is made during an active dispute over eligibility. On that basis, the refund claim was not barred by limitation under section 11B. The Tribunal also found that the first appellate authority had not examined the substantive entitlement to refund on merits, including the underlying credit eligibility under the FTP and related conditions, and therefore remanded the matter for fresh adjudication after hearing the assessee.

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Issues: (i) Whether the reversal of CENVAT credit was made under protest so as to exclude the refund claim from the bar of limitation under section 11B; (ii) whether the matter required reconsideration on the merits of entitlement to refund.

Issue (i): Whether the reversal of CENVAT credit was made under protest so as to exclude the refund claim from the bar of limitation under section 11B.

Analysis: The reversal was made in the midst of a dispute on eligibility of credit in relation to exports under the DFIA scheme. The assessee had simultaneously informed the department that it reserved the right to reclaim the amount if the credit was found admissible. The absence of the exact words "under protest" was held to be immaterial, because protest may be expressed in any form and a written reservation of rights reflects a contested payment or debit. The Tribunal treated the communication as sufficient manifestation of protest and held that the refund could not be rejected as time barred on that ground.

Conclusion: The reversal was held to be under protest and the refund claim was held not to be barred by limitation.

Issue (ii): Whether the matter required reconsideration on the merits of entitlement to refund.

Analysis: The first appellate authority had not examined the substantive eligibility of the refund claim on merits, including the underlying entitlement to credit in the context of the FTP and related exemption conditions. Since that issue had not been decided, the Tribunal found it appropriate to send the matter back for a fresh decision after hearing the assessee.

Conclusion: The matter was remanded to the Commissioner (Appeals) for a decision on the merits of refund eligibility.

Final Conclusion: The limitation objection was rejected, but the substantive entitlement to refund was left for fresh adjudication on remand.

Ratio Decidendi: A written reservation of the right to reclaim a reversed amount can amount to protest, and protest need not be expressed in any fixed formula or technical wording.

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