Cenvat pre-deposit refunds must be re-credited in account, not paid in cash, absent cash outflow or special entitlement.

A refund of a pre-deposit made by debit in the Cenvat account, while the assessee continued to operate under the Cenvat scheme, was held not to be payable in cash. Because there was no cash duty outflow after the debit and no export-related claim or similar basis justifying monetary reimbursement, the debit did not alter the character of the amount into cash. The proper mode of refund was re-credit in the Cenvat account, and the cash-refund precedent relied on was found inapplicable on its facts.

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Issues: Whether the amount pre-deposited by debit in the Cenvat account could be refunded in cash instead of by re-credit in the Cenvat account.

Analysis: The pre-deposit had been made from the Cenvat account while the assessee continued to operate under the Cenvat scheme and maintained the account. The assessee had not suffered a cash duty outflow after the deposit, nor was the refund shown to arise from any export-related claim or other circumstance justifying cash reimbursement. In these circumstances, mere debit in the Cenvat account did not change the character of the amount into cash, and the refund could only be restored in the account by way of re-credit. The authority relied upon for cash refund was held inapplicable on its facts.

Conclusion: Cash refund was not admissible; the refund had to be by re-credit in the Cenvat account and the Revenue succeeded.

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