Refund of unutilized credit on conversion to a 100% EOU was not admissible absent statutory provision.

Unutilized CENVAT credit remaining with a DTA unit on conversion into a 100% EOU was held not refundable, because Central Excise law contained no provision permitting such a refund. The Board circular relied upon treated credit relating to plant and machinery as lapsing on conversion, and the claim was not based on credit used in the manufacture of export products. As the credit arose from domestic clearances made before the unit became a 100% EOU, the refund claim was not admissible and was correctly rejected.

---

---

Issues: Whether unutilized credit lying with a DTA unit could be refunded on conversion of the unit into a 100% EOU.

Analysis: The refund claimed was of credit remaining unutilized at the time of conversion of the unit from DTA to 100% EOU. The decision turned on the absence of any provision under Central Excise law permitting refund of such unutilized credit. The Board circular relied upon treated credit in respect of plant and machinery as lapsing on conversion, and the claim did not arise from credit used in the manufacture of export products. The credit related to domestic clearances made before the unit became a 100% EOU.

Conclusion: The refund of unutilized credit was not admissible and the claim was rightly rejected.

---