Refund of unutilized CENVAT credit for export oriented units upheld under Rule 5 and deemed export treatment.

A 100% Export Oriented Unit was treated as eligible to claim refund of unutilized CENVAT credit on duty-paid inputs and input services under Rule 5 of the CENVAT Credit Rules, 2004. The analysis relied on the CENVAT credit scheme for EOUs, the refund mechanism, and the treatment of supplies to EOUs as deemed exports under the applicable Foreign Trade Policy and notification framework. The position was consistent with the assessee's own earlier case, and the refund on unutilized credit was held admissible, with the Revenue's challenge rejected.

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Issues: Whether refund could be claimed in respect of unutilized CENVAT credit taken on input services and inputs by a 100% Export Oriented Unit.

Analysis: The refund claim was examined in the light of the CENVAT credit scheme applicable to export oriented units and the restriction in the refund mechanism. The earlier decision in the assessee's own case had already held that EOUs were entitled to avail CENVAT credit on duty paid inputs and input services and, where such credit remained unutilized, refund could be claimed under Rule 5 of the CENVAT Credit Rules, 2004. The applicable notification and the Foreign Trade Policy treatment of supplies to EOUs as deemed exports supported that position.

Conclusion: The refund on unutilized CENVAT credit was held to be admissible, and the Revenue's challenge was rejected.

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