CENVAT refund on exported goods upheld where drawback was only an alternative and not a bar to refund.

CENVAT credit refund on inputs used in exported goods was available where the exporter produced supporting export records and the goods were exported without payment of duty. The Tribunal read Rule 5 of the CENVAT Credit Rules as providing an alternative between refund and drawback for the same duty, so the mere availability of drawback did not bar refund. The refund claim was therefore rightly allowed, and the exporter was not disentitled merely because duty drawback could have been claimed.

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Issues: Whether the assessee was entitled to refund of CENVAT credit in respect of inputs used in exported goods, and whether availment of duty drawback barred such refund.

Analysis: The Tribunal had found that under the Central Excise Rules and the CENVAT Credit Rules, credit on inputs used in exported goods was available whether the final goods were exempted or dutiable. It further found that where goods are exported without payment of duty, refund of duty paid on inputs is permissible, and that the assessee had produced the relevant export documents, including shipping bills, ARE-1 forms, bank realisation certificate, and CENVAT records. The proviso to Rule 5 of the CENVAT Credit Rules was read as creating an option between drawback and refund, and not permitting both in respect of the same duty.

Conclusion: The refund claim was rightly allowed, and the assessee was not disentitled on the ground that drawback could have been claimed.

Ratio Decidendi: Where exported goods qualify for CENVAT-credit-related refund and the exporter has not availed drawback or rebate in respect of the same duty, refund cannot be denied merely because drawback was an available alternative remedy.

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