Cash refund of debited CENVAT credit allowed where the manufacturing unit was closed and Rule 5 imposed no express bar.

Cash refund of CENVAT credit debited during proceedings was held permissible where the manufacturing unit had been closed, because Rule 5 of the CENVAT Credit Rules was treated as not expressly barring refund in cash in such circumstances. The earlier appellate direction allowing cash refund was therefore regarded as in accordance with law, and the Revenue's challenge failed.

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Issues: Whether refund of CENVAT credit debited during proceedings can be granted in cash when the assessee's unit is closed.

Analysis: The issue was treated as no longer res integra. Reliance was placed on the view that Rule 5 of the CENVAT Credit Rules does not expressly bar payment of refund in cash, particularly where the credit amount had been debited during proceedings and the manufacturing unit had been closed. On that basis, the earlier appellate order directing cash refund was found to be in accordance with law.

Conclusion: Cash refund of the debited CENVAT credit is permissible in the circumstances, and the Revenue's challenge fails.

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