CENVAT credit refund on exports under bond was allowed even where the goods were processed and packed before export.

Refund of accumulated CENVAT credit was held admissible for goods exported under bond where input credit could not be otherwise adjusted. Rule 5 of the CENVAT Credit Rules, 2002 was applied to give effect to the export relief scheme, and the entitlement was not confined to manufacture within Section 2(f) of the Central Excise Act, 1944. Goods exported after processing and packing were treated as export goods for the purpose of the refund claim. The assessee's claim was therefore allowed.

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Issues: Whether refund of accumulated CENVAT credit was admissible on goods exported under bond when the exported goods had been subjected to processing but the dispute centred on whether manufacture was necessary for the export-linked refund claim.

Analysis: Rule 5 of the CENVAT Credit Rules, 2002 allows refund of credit taken on inputs used in final products cleared for export under bond where adjustment is not possible. The export scheme is intended to relieve exports of domestic taxes, and the entitlement to export benefits is not confined to manufacture as defined under Section 2(f) of the Central Excise Act, 1944. Relying on the earlier Tribunal view, the goods exported after processing and packing were treated as export goods for the purpose of refund under the CENVAT scheme.

Conclusion: The refund of accumulated CENVAT credit was admissible and the claim was allowed in favour of the assessee.

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