Reasonable-steps compliance under Cenvat Credit Rules governs rebate eligibility when credit is routed through supplier invoices.

Rebate on exported processed fabrics was unavailable where the claimant relied on CENVAT credit passed through weavers' invoices but had not taken the reasonable steps required under the Explanation to Rule 7(2) of the Cenvat Credit Rules, 2002. The Gujarat High Court applied its earlier decision and held that invoices and banking-channel payment alone did not establish valid credit for rebate purposes unless the prescribed verification steps showed that duty had been properly paid on the inputs. As the statutory precondition was not satisfied, the Revenue's denial of rebate was upheld.

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Issues: Whether rebate of duty was admissible when the petitioners had not taken the reasonable steps required under Rule 7(2) of the Cenvat Credit Rules, 2002.

Analysis: The petitioners claimed rebate on exported processed fabrics on the basis of CENVAT credit passed through invoices issued by weavers. The Court applied its earlier decision on the same issue and held that the mere production of invoices and payment through banking channels did not suffice where the petitioners had not complied with the reasonable-steps requirement in the Explanation to Rule 7(2). Since the prescribed steps to verify that duty had been appropriately paid on the inputs were not taken, the credit could not be treated as valid for rebate purposes.

Conclusion: Rebate was not admissible and the denial by the Revenue was upheld.

Final Conclusion: The petitions failed because the statutory precondition for availing the benefit of CENVAT credit had not been satisfied.

Ratio Decidendi: Rebate based on CENVAT credit is unavailable unless the claimant complies with the reasonable-steps requirement prescribed under the governing rules.

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