Modvat credit restoration is not an ordinary refund claim; wrongly utilised credit may be restored after PLA payment.

A claim for restoration of wrongly utilised Modvat credit is not an ordinary refund claim under Section 11B. The credit scheme under Rule 57F governs utilisation of credit and does not provide a general refund of such credit, except in the limited situation of final products. Because the issue was maintainability of restoration, not a duty refund in the usual sense, rejection on limitation was incorrect. Once the wrong utilisation was made good through payment via PLA, restoration of the credit was the proper relief and the departmental challenge failed.

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Issues: Whether the claim for restoration of Modvat credit could be treated as a refund claim under Section 11B, and whether the credit wrongly utilised could be restored after payment through PLA.

Analysis: The relief sought was not a refund of duty in the ordinary sense but restoration of Modvat credit that had been wrongly utilised. Under Rule 57F, the scheme governed utilisation of credit and did not provide for refund of such credit, except in the limited situation of final products. The rejection of the claim on limitation was therefore incorrect, because the real issue was maintainability of a refund claim for Modvat credit. Once the respondents had made good the wrong utilisation by payment through PLA, the correction of that error warranted restoration of the credit.

Conclusion: The claim for refund was not the proper legal characterisation, but the request for restoration of Modvat credit was maintainable; the order allowing restoration of credit was and the department's challenge failed.

Ratio Decidendi: A claim seeking restoration of wrongly utilised Modvat credit is not to be treated as an ordinary refund claim under Section 11B, and where the scheme contains no provision for refund of such credit, the proper relief is restoration of credit rather than rejection on limitation.

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