Cash refund of restored Cenvat credit denied where the assessee used the credit and was never forced to pay in cash.

Cash refund of reversed Cenvat credit was denied where the credit, after being held admissible, was restored and then utilised for payment of central excise duty. The record showed no demand by the Revenue that the assessee pay in cash or through PLA, and no prevention of utilisation of credit. The precedents supporting cash refund applied only where an assessee had been compelled to pay in cash and deprived of credit utilisation, which was not the factual position here. The order granting cash refund was therefore set aside and the Revenue's challenge succeeded.

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Issues: Whether the assessee was entitled to cash refund of amounts reversed from the Cenvat credit account after the reversed credit was subsequently held admissible and restored.

Analysis: The amount had been debited from the assessee's Cenvat account during the relevant period and the reversed credit was later held admissible and credited back. The assessee thereafter utilised the restored credit for payment of central excise duty. The record did not show that the Revenue had at any stage required payment in cash or from PLA. The precedents relied upon for granting cash refund applied to situations where the assessee had been compelled to pay in cash and prevented from utilising credit, which was not the factual position here.

Conclusion: Cash refund was not justified and the assessee was not entitled to such refund.

Final Conclusion: The order granting cash refund was set aside and the Revenue's challenge succeeded.

Ratio Decidendi: Cash refund of reversed Cenvat credit is not allowable where the credit is restored and utilised, and there was no insistence by the Revenue on payment in cash or prevention of utilisation of credit.

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