Cash refund of unutilised export credit upheld where factory closure prevented utilisation of accumulated CENVAT credit.

Refund arising from reversal of credit linked to exports was treated as payable in cash where the exporter's factory had closed and the accumulated credit could not be utilised. The analysis relied on the Board circular on cash refund of unutilised credit, which recognises that exporters should not be denied refund merely because the credit remains stranded in the account. On those facts, the unutilised export-linked credit was refundable in cash rather than only by credit entry in the CENVAT account.

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Issues: Whether the refund arising out of reversal of credit was payable in cash to an exporter whose factory was closed and who could not utilise the accumulated credit.

Analysis: The refund claim related to credit accumulated due to exports. The authority relied on the Board circular dealing with cash refund of unutilised credit, which recognises that exporters should not be denied refund where the credit cannot be utilised. It was found that the appellant was an exporter, the credit had accumulated from export activity, and the factory was closed, so the amount lying in the credit account could not be utilised.

Conclusion: The refund was held to be payable in cash and not merely by crediting the CENVAT account, in favour of the assessee.

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