Cenvat refund in cash is permissible where exemption is chosen and the credit cannot be utilised.

Refund of Cenvat credit lying in the account could be sanctioned in cash where the assessee had opted for exemption under Notification No. 50/03-CE and was unable to utilise the credit. The Tribunal noted that, in such circumstances, there was no legal bar to refund by cheque or cash instead of merely restoring the amount to the Cenvat account. On that basis, cash refund was held permissible and the Revenue's objection was rejected.

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Issues: Whether refund of the amount lying in cenvat account could be sanctioned in cash where the assessee had opted for exemption under Notification No. 50/03-CE and was not in a position to utilise the cenvat credit.

Analysis: The assessee had opted for exemption under Notification No. 50/03-CE and, on that account, could not utilise the cenvat account. In such a situation, refund in cash was held to be permissible. The Tribunal relied on its earlier view that where the unit had opted for the exemption scheme and had no usable cenvat account, there was no legal bar to refund being granted by cheque or cash instead of crediting the amount back to the cenvat account.

Conclusion: Refund in cash was permissible and the Revenue's objection was rejected.

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