Refund of deemed credit is limited to unutilised balances; utilised credit cannot be refunded again.

Refund of deemed credit under Notification No. 29/1996-C.E. (N.T.) is confined to credit that remains unutilised. Where the bond documents and deemed credit register showed that part of the credit had already been used as deemed credit and only the balance was debited for export, refund of the same utilised amount was not permissible. The original authority's rejection of the claim was therefore consistent with the notification, and the later appellate reasoning did not change the underlying factual position that the credit was not wholly unutilised. The refund claim was accordingly not sustainable to the extent the credit had already been utilised.

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Issues: Whether the assessee was entitled to refund of deemed credit under Notification No. 29/1996-C.E. (N.T.) when the credit had already been utilised, and whether the refund claim could be sustained on the basis that only an unutilised balance was refundable.

Analysis: The notification contemplated refund only of deemed credit that remained unutilised and could not be adjusted towards duty on home clearances or exports under bond. On the facts, the bond documents and deemed credit register showed that 50% of the duty amount had in fact been utilised as deemed credit, while the remaining amount was debited in the bond for export. Once the credit had been utilised, refund of the same amount was not permissible, and the claim rejected by the original authority was in accordance with law. The procedural reasoning adopted by the first appellate authority did not alter the factual position that the credit was not wholly unutilised.

Conclusion: The assessee was not entitled to refund of the utilised deemed credit, and the Revenue's appeals succeeded while the assessee's appeal failed.

Final Conclusion: Refund under the notification was confined to unutilised deemed credit, and because the assessee had already utilised the credit, the rejection of the refund claims was restored.

Ratio Decidendi: Refund of deemed credit is allowable only to the extent the credit remains unutilised; once the credit has been utilised for payment of duty, the same amount cannot be refunded again.

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