Rule 5 refund claims cannot be denied by re-examining Cenvat credit admissibility outside the statutory recovery process.

In refund proceedings under Rule 5 of the Cenvat Credit Rules, the authority must confine itself to the conditions in Rule 5 and the relevant notification. It cannot test the admissibility of credit already availed or deny refund on the ground that the underlying input services were ineligible unless the statutory recovery mechanism for wrong credit is first invoked under Rule 14 through the prescribed procedure. The denial of refund on that basis was unsustainable, and the matter was remanded for fresh consideration limited to Rule 5.

---

---

Issues: Whether, while examining a refund claim under Rule 5 of the Cenvat Credit Rules, the authorities could deny refund by first deciding the admissibility of the underlying Cenvat credit without proceeding under Rule 14 and without a show-cause notice.

Analysis: The refund claim had to be tested only on the conditions prescribed under Rule 5 and the notification issued thereunder. The authorities below travelled beyond that inquiry by examining whether the input services were eligible for Cenvat credit in the first place. The proper mechanism for recovery or questioning wrongly taken credit lies under Rule 14, which contemplates recovery in accordance with the prescribed statutory procedure. In the absence of such procedure, the admissibility of credit already availed could not be denied while adjudicating the refund claim.

Conclusion: The denial of refund on the basis of alleged ineligibility of the credit was unsustainable, and the matter was remanded for fresh decision confined to Rule 5 and the notification issued thereunder.

Ratio Decidendi: In proceedings for refund under Rule 5, the adjudicating authority cannot determine the correctness of Cenvat credit already availed except through the statutory recovery mechanism provided for wrongful credit.

---