Cenvat refund admissible after drawback reversal, as there was no prohibited double benefit.

Refund of Cenvat credit could not be denied merely because drawback had initially been claimed, where the drawback amount was later reversed. Applying Rule 5 and Rule 7 of the Cenvat Credit Rules, 2002, the decisive factor was that there was no simultaneous retention of both drawback and refund benefit. The authorities denying refund on a double-benefit theory were therefore held inapplicable, and the refund was found admissible.

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Issues: Whether refund of Cenvat credit could be denied merely because the assessee had initially claimed drawback, when the drawback amount was subsequently reversed.

Analysis: The refund claim was examined with reference to Rule 5 and Rule 7 of the Cenvat Credit Rules, 2002. The decisive fact was that the assessee had reversed the drawback amount, so the case did not involve an impermissible simultaneous retention of drawback and refund benefit. On that footing, the earlier authorities supporting denial of refund on the basis of double benefit were held inapplicable, and the refund was found to be admissible.

Conclusion: The assessee was entitled to the refund, and the revenue challenge failed.

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