Modvat credit refund requires proof of export under bond; absent that factual basis, the claim is inadmissible.

Refund of accumulated Modvat credit under Rule 57F is not available where the assessee fails to prove export under bond and the factual basis for earlier relief is disproved. The earlier allowance of deemed credit refund was premised on inputs having been used in goods exported under bond, but the record showed export on payment of duty under rebate claim instead, and the assessee produced no material to rebut that finding. On that basis, the refund claim was held inadmissible, and adverse inference could be drawn from the failure to produce evidence.

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Issues: Whether refund of accumulated Modvat credit under Rule 57F was admissible when the assessee had not established export under bond and had misdeclared the facts before the Tribunal.

Analysis: Refund under the deemed credit scheme was granted earlier on the footing that the inputs on which credit was taken had been used in goods exported under bond, and that procedural lapses could not defeat the substantive refund. In the present proceeding, the factual foundation for that relief was found to be absent. The record showed that the goods were exported on payment of duty under claim of rebate, and the assessee failed to rebut the finding or produce material to show export under bond. In these circumstances, the earlier refund order could not be treated as authorising payment of refund contrary to the proved facts. The Tribunal also relied on the principle that withholding or failing to produce evidence permitted an adverse inference.

Conclusion: The refund claim was not admissible, and rejection of the appeal was justified.

Ratio Decidendi: Refund of accumulated Modvat credit cannot be granted where the factual basis for the earlier allowance is disproved and the assessee fails to establish the statutory conditions for refund.

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