Rule 5 refund of accumulated Cenvat credit upheld where export leaves credit unutilised for domestic clearances.

Accumulated Cenvat credit attributable to Additional Duties of Excise (Textiles and Textile Articles) was held refundable under Rule 5 of the Cenvat Credit Rules, 2004 where exported final products left the credit unutilised and it could not be used for domestic clearances. The phrase "where for any reason" in Rule 5 was applied broadly, so the restriction on using that credit for payment of other duties did not defeat the refund mechanism. The assessee was therefore entitled to refund relief.

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Issues: Whether accumulated Cenvat credit attributable to Additional Duties of Excise (Textiles and Textile Articles) could be refunded under Rule 5 of the Cenvat Credit Rules, 2004 when the final products were exported and the credit could not be utilised for domestic clearances.

Analysis: Rule 5 permits refund of Cenvat credit where, for any reason, the credit cannot be utilised. The restriction on utilisation of credit of Additional Duties of Excise (Textiles and Textile Articles) for payment of other duties did not defeat the refund mechanism where the exported final products generated unutilised credit. The expression "where for any reason" in Rule 5 was read liberally so as to cover a situation where export of the final products left the credit incapable of utilisation in domestic clearances.

Conclusion: The accumulated credit was refundable under Rule 5, and the assessee was entitled to relief.

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