CENVAT credit refund remains available despite drawback claim where the drawback covers only customs duties and the old Rule 5 applies.

Refund of unutilized CENVAT credit under Rule 5 was not barred merely because the exporter had claimed drawback, where the drawback related only to the customs portion and not to Central Excise duty. The Board's circular recognised that refund of MODVAT/CENVAT credit on inputs used in exported goods is independent of drawback relatable to customs duties, so rejection on drawback alone was unsustainable. The amended Rule 5 also preserved examination of eligible claims under the erstwhile rule within the prescribed time, so the claim was to be considered under the earlier provision.

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Issues: Whether refund of unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004 was admissible to an exporter who had also availed drawback, and whether the claim had to be examined under the erstwhile rule applicable to the period.

Analysis: The circular issued by the Board clarified that where only the customs portion of drawback is claimed, refund of unutilized Central Excise duty or CENVAT credit on inputs used in exported goods is not barred. The reasoning was supported by the view that refund of MODVAT or CENVAT credit is independent of drawback relatable to customs duties. It was also noted that the amendment to Rule 5 preserved consideration of claims under the erstwhile rule within the stipulated time, and the rejection on the basis of drawback alone was not sustainable.

Conclusion: The refund claim was held admissible, and the assessee was entitled to consideration of the claim under the erstwhile Rule 5 despite having claimed drawback.

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