Cenvat credit on non-input HSD oil cannot be refunded when no valid credit entitlement exists.

Duty paid on HSD oil could not be treated as eligible Cenvat credit because it was not covered as an input under Rule 2(k) of the Cenvat Credit Rules, 2004. Refund of unutilised credit presupposes a valid entitlement to take that credit in the first place. Since no credit could be availed on HSD oil, neither utilisation nor refund could arise. The refund claim was therefore not maintainable, and the lower appellate authority's order was upheld.

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Issues: Whether duty paid on HSD oil, which is not covered as an input under Rule 2(k) of the Cenvat Credit Rules, 2004, could be treated as eligible credit so as to permit refund when the assessee was unable to utilise it.

Analysis: The cited circular and notification concerned utilisation of Cenvat credit by 100% EOUs and refund of credit that could not be utilised. Such refund presupposes that the assessee is first entitled to take the credit. Since HSD oil was found not to be covered as an input under the Cenvat Credit Rules, 2004, no credit could be availed in the first place. In that situation, neither utilisation nor refund of such credit could arise.

Conclusion: The refund claim was not maintainable and the lower appellate authority's order was upheld.

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