Refund of accumulated Cenvat credit on exported goods cannot be denied merely because the credit remained unutilised.

Refund of accumulated Cenvat credit under Rule 5 is available where the credit arises from inputs used in goods exported under bond and cannot be utilised against duty on home clearances; the reason the credit remained unutilised is immaterial. On that basis, denial of refund was unsustainable, and the assessee was entitled to consequential relief.

---

---

Issues: Whether refund of accumulated Cenvat credit on inputs used in goods exported under bond could be denied on the ground that the credit remained unutilised.

Analysis: Refund under Rule 5 of the Cenvat Credit Rules, 2002 is available where credit relates to goods exported and cannot be utilised for payment of duty on clearances for home consumption. The reason why the credit remained unutilised was immaterial once the exported goods gave rise to accumulated credit. The order denying refund was therefore unsustainable.

Conclusion: The refund could not be denied and the assessee was entitled to consequential relief.

---