Refund under excise notification must be reduced by Cenvat credit availed on inputs during the relevant period.

Refunds under Notification No. 33/99-C.E., as amended by Notification No. 61/2002-C.E., had to be computed after reducing the Cenvat credit availed on inputs used in or in relation to the manufacture of the cleared goods. The amended proviso capped the refund at the duty paid less such input credit, and the refund sanctions made during the relevant period were correctly calculated on that basis. As the claims were properly restricted by the Cenvat credit availed in the respective months, it was unnecessary to decide whether the amendment operated retrospectively.

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Issues: Whether refund claims under Notification No. 33/99-C.E. dated 08-07-1999, as amended, were to be reduced by the Cenvat credit availed on the inputs used in the manufacture of the cleared goods, and whether the Commissioner (Appeals) was justified in holding that the amended proviso could not be applied to the refund sanctions made during the relevant period.

Analysis: The amended notification, introduced by Notification No. 61/2002-C.E. dated 23-12-2002, inserted a proviso that refund shall not exceed the duty paid less the amount of Cenvat credit availed on inputs used in or in relation to manufacture of the goods cleared under the notification. The refund sanctions were passed on 29-01-2003, 21-02-2003, and 17-03-2003, and the claims were correctly computed by taking into account the Cenvat credit availed during the respective months. On that basis, it was unnecessary to enter into the question of the date from which the amendment was given retrospective effect.

Conclusion: The refund was properly restricted by the Cenvat credit availed, and the order of the Commissioner (Appeals) could not be sustained.

Final Conclusion: The appeal succeeded and the Revenue's refund computation was upheld.

Ratio Decidendi: Where a refund notification expressly limits refund by the amount of Cenvat credit availed on inputs, the refund must be computed after deducting such credit for sanctions made during the operative period of the amended notification.

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