CENVAT refund on exported goods remains admissible despite nil duty on the final product.

Refund of accumulated CENVAT credit under Rule 5 was held admissible for goods exported under bond, because exports fall within the exception to the general restriction on credit. The fact that the final product attracted nil duty or was otherwise exempt did not, by itself, defeat the refund where the inputs were used in relation to the exported goods. Applying settled precedent, the claim was allowed and the Revenue's challenge failed.

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Issues: Whether refund of accumulated CENVAT credit under Rule 5 of the Cenvat Credit Rules, 2004 is admissible where the final product is cleared for export and attracts nil rate of duty.

Analysis: The entitlement to refund of accumulated CENVAT credit in respect of exports had already been settled by precedent. Goods exported under bond fall within the exception to the general restriction on credit, and the fact that the final product is exempt or attracts nil duty does not, by itself, defeat refund where the inputs were used in relation to exported goods. The earlier decisions relied upon were applied to hold that Rule 5 permits refund in such a situation.

Conclusion: The refund claim was admissible and the Revenue's challenge failed.

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