Timely reversal of CENVAT credit satisfies exemption-linked refund conditions, so initial availment alone does not bar the claim.

Refund under Notification No. 102/2007-Cus cannot be denied merely because CENVAT credit was initially availed, where the credit was reversed before clearance or sale and before the refund claim was filed. The operative condition is non-availment at the time the exemption-linked benefit is finally claimed, and timely reversal is treated as compliance with that condition. On that basis, the Tribunal held that the initial entry of credit did not by itself defeat entitlement to the refund.

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Issues: Whether refund under Notification No. 102/2007-Cus could be denied on the ground that CENVAT credit had been availed initially, when the credit was reversed before clearance or sale and before filing the refund claim.

Analysis: The only substantive dispute was whether the initial availment of credit permanently disentitled the appellant from claiming the exemption-linked refund. The Tribunal applied the settled principle that the relevant condition is satisfied when the credit is reversed before the benefit is finally claimed and before the exempted sale is effected. Relying on the principle recognised in the cited precedent, it held that initial entry of credit does not by itself defeat the notification benefit if the credit is subsequently reversed in time.

Conclusion: The refund could not be rejected on this ground, and the issue was decided in favour of the appellant.

Ratio Decidendi: Where an exemption or refund notification requires non-availment of credit, timely reversal of credit before claiming the benefit amounts to compliance with the condition and the refund cannot be denied merely because credit was initially taken.

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