Optional concessional exemption cannot be forced on assessee; refund denial for non-availment was unsustainable.

Refund could not be denied merely because the assessee did not avail a later optional concessional exemption notification. Where the notification granted only a concessional rate and did not create a compulsory exemption scheme, the Revenue could not require the assessee to adopt that concession instead of paying duty at the tariff rate. The assessee had paid duty and claimed refund under the earlier notification after exhausting CENVAT credit, and that claim was held to be maintainable. The rejection of refund on the ground of non-availment of the optional concessional notification was unsustainable and was set aside.

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Issues: Whether the Revenue could deny refund on the footing that the assessee ought to have availed an optional concessional exemption notification instead of paying duty at the tariff rate.

Analysis: The refund was rejected only because the assessee had not taken benefit of the later notification granting duty at a concessional rate. The notification was not one granting a wholly exempt turnover but only a concessional rate. In such a situation, the statutory principle governing exemption does not permit the Revenue to compel the assessee to adopt the concession when the assessee had not chosen to do so. The assessee had paid duty and sought refund in accordance with the earlier notification under which refund was claimed after exhausting cenvat credit.

Conclusion: The refund could not be denied on the ground that the assessee was bound to avail the optional concessional notification. The rejection of refund was unsustainable and was set aside in favour of the assessee.

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