Unutilised Cenvat credit refund for bond exports remains admissible despite separate rebate exports and credit utilisation.

Refund of unutilised Modvat/Cenvat credit was admissible for exports made under bond where the exporter had also made other exports under rebate and used the available credit for duty payment on those clearances. Notification No. 5/2006-C.E. (N.T.) allows refund when credit cannot be fully utilised for export clearances during the relevant period, and the exporter's choice to export under bond or under rebate is not restricted to a single route for all exports. Refund could not be denied merely because credit was applied against rebate clearances to the extent possible, and the claim for bond exports was therefore allowed.

---

---

Issues: Whether refund of unutilized Modvat/Cenvat credit was admissible for exports made under bond when the exporter had also made other exports under rebate and utilized credit for duty payment on those clearances.

Analysis: The refund claim was made under Notification No. 5/2006-C.E. (N.T.), which permits refund of unutilized credit where the manufacturer or service provider is unable to utilise the credit for exports during the relevant period. The record showed that the exporter had used the available credit for export clearances made on payment of duty under rebate, and the fact that some exports were made under rebate did not compel the exporter to adopt that route for all exports. The law gives the exporter an option either to export under bond or under rebate, and refund cannot be denied merely because credit was utilised to the extent possible on rebate clearances.

Conclusion: The refund claim for exports under bond was admissible, and the Revenue's objection failed.

---