The structure and vibrational spectrum of the novel endohedral fullerene C@C was studied by Raman spectroscopy, with particular emphasis on the rotational transitions of the diatomic unit in the low-energy Raman spectrum. We report evidence for tunneling of this unit through the rotation plane and observe anomalous narrowing in a hindered rotational mode. We also report complementary density functional theory calculations that support our conclusions and discuss potential applications to quantum computing and nonvolatile memory devices.