Cash refund for unused credit after unit closure where sanctioned refund could not be effectively utilised.

Refund arising from finalisation of provisional assessment, once already held admissible and finalised in earlier proceedings, had to be disbursed in cash where the assessee could not utilise Cenvat credit after closure of the unit. The dispute concerned only the mode of payment, and the Tribunal found it unsustainable to credit part of the sanctioned refund to RG 23A Part II when the credit could not be effectively used. Relying on settled precedent, the Tribunal directed cash refund.

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Issues: Whether the refund arising on finalisation of provisional assessment, already held admissible, was required to be paid in cash when the assessee could not utilise credit and the unit had closed.

Analysis: The refund had already attained finality after the earlier appellate order in favour of the assessee and rejection of the Revenue's challenge. The remaining dispute was only about the mode of disbursement. The Tribunal noted that the authorities persisted in crediting part of the sanctioned refund to RG 23A Part II despite the closure of the unit and the assessee's inability to utilise the credit. Relying on settled precedent that refund must be granted in cash where credit cannot be effectively used, the Tribunal held that the departmental approach was unsustainable.

Conclusion: The refund was to be paid in cash, and the assessee succeeded.

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