Vague show cause notice cannot sustain Cenvat credit refund disallowance; missing statutory basis invalidated the demand.

A refund disallowance of Cenvat credit could not be sustained because the show cause notice did not invoke the relevant statutory basis or set out necessary particulars. Section 73 of the Finance Act, 1994 and Rule 14 of the Cenvat Credit Rules, 2004 were not cited, leaving the notice vague and invalid. On that footing, the disallowance was set aside and refund with interest and consequential benefits was directed.

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Issues: Whether the disallowance of refund of Cenvat credit could be sustained when the show cause notice did not invoke the relevant statutory provisions and lacked necessary particulars.

Analysis: The notice sought to disallow part of the refund claim, but neither Section 73 of the Finance Act, 1994 nor Rule 14 of the Cenvat Credit Rules, 2004 was invoked. In the absence of the foundational provision and necessary particulars, the notice was held to be vague and invalid, leaving no valid basis to sustain the disallowance.

Conclusion: The disallowance of Rs. 2,61,059/- was set aside and the refund with interest and consequential benefits was directed.

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