Refund of accumulated AED credit allowed where exports prevented utilisation and no rebate of the same duty was claimed.

Accumulated credit of Additional Duty of Excise (T&TA) on inputs was held refundable under Rule 5 of the CENVAT Credit Rules, 2002 because the final product was not liable to AED (T&TA), the entire production was exported, and the credit could not be used for payment of duty or claimed as rebate. The refund mechanism applied where adjustment was not possible, and the proviso barred refund only when rebate of the same duty had already been claimed. Relying on cited authorities and CBEC clarification, the rejection of the refund claim was found unsustainable and the assessee was entitled to refund of the accumulated credit.

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Issues: Whether accumulated credit of Additional Duty of Excise (T&TA) paid on inputs was refundable under Rule 5 of the CENVAT Credit Rules, 2002 when the final product was exempt from AED (T&TA) but exported on payment of basic excise duty, and whether the rebate provisions barred such refund.

Analysis: The final product was liable to basic excise duty but not to AED (T&TA), and the entire production was exported. In that situation, the AED (T&TA) suffered on the input accumulated in the assessee's account and could not be utilised for payment of duty on any final product or claimed as rebate. Rule 5 of the CENVAT Credit Rules, 2002 allows refund where such adjustment is not possible, subject to the proviso that bars refund only where rebate of the same duty has been claimed. The cited authorities and the CBEC clarification supported the view that refund of such accumulated credit remained admissible.

Conclusion: The refund claim was admissible and the denial by the lower authorities was unsustainable.

Final Conclusion: The assessee was entitled to refund of the accumulated AED (T&TA) credit, and the impugned rejection was set aside.

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