Refund of duty and Cenvat credit denied where non-exported goods attracted duty and domestic clearance barred input credit.

Duty paid on the quantity of goods not actually exported was not refundable because amounts lawfully payable as duty cannot be returned. Refund of Cenvat credit attributable to inputs used in goods cleared for domestic consumption was also not admissible, as the applicable exemption for such clearance barred availment of input duty credit. The refund claims were therefore rejected.

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Issues: Whether refund of duty paid on the quantity of goods not exported was admissible, and whether refund of the Cenvat credit attributable to inputs used in the goods cleared for domestic consumption could be claimed.

Analysis: Part of the goods obtained duty-free for export was not exported, and duty became payable on that quantity. Amounts that are legally payable as duty cannot be refunded. The claim for refund of Cenvat credit also failed because the relevant exemption notification for domestic clearance carried a condition prohibiting availment of input duty credit, so no refund of such credit could arise.

Conclusion: The refund claims were not admissible and the appeal was rejected.

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