Limitation for refund by ledger credit runs from actual credit, not sanction, because refund is complete only on entry.

For limitation in a refund by credit entry in the Personal Ledger Account, the relevant date is the date on which the assessee actually takes credit, not merely the date of sanction of refund. Rule 10 of the Central Excise Rules was applied on the footing that a refund by voucher is complete when issued, but a refund by ledger credit is not complete until the amount is actually credited and leaves the Government's control. The matter was remitted because the lower authorities had not examined the factual date of actual credit, which was necessary to determine whether the claim was time-barred.

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Issues: Whether, for the purpose of limitation in a case of refund by credit in the Personal Ledger Account, the relevant date is the date of sanction of refund or the date on which the credit is actually taken.

Analysis: The governing provision was Rule 10 of the Central Excise Rules, with the relevant date for erroneous refund being the date of refund. A distinction was drawn between refund by issuance of voucher and refund by credit entry in the Personal Ledger Account. In the latter situation, the refund is not complete on the date of sanction alone, because the amount remains with the Government until the assessee actually takes credit. The Court also relied on the principle that, where refund has in fact been made, limitation runs from actual payment and not merely from the order sanctioning refund. However, the factual question as to the exact date on which credit was actually taken had not been examined by the lower authorities.

Conclusion: The date of actual credit in the Personal Ledger Account is the relevant date for limitation, not merely the date of sanction of refund. The matter was remitted for determination of that factual issue and for a fresh decision on limitation.

Ratio Decidendi: In cases where refund is given by credit entry rather than by cash or voucher, limitation runs from the date on which the assessee actually takes the credit, because the refund is completed only on that date.

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