Cash refund of accumulated Modvat credit allowed after levy change made credit unusable, with curable procedural defect.

Accumulated deemed Modvat credit became refundable in cash when the textile levy regime changed and the credit could no longer be utilised. Notification No. 29 of 1996 was read broadly to cover inability to adjust credit for any reason, including the shift to a compounded levy scheme, so the refund claim was allowable. The objection based on Notification No. 85/87-CE failed because the refund arose only after utilisation became impossible. Omission to specify the relevant quarter was treated as a curable defect and did not justify rejection of the claim. No substantial question of law arose from the concurrent findings, and the revenue challenge failed.

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Issues: Whether the assessee was entitled to cash refund of accumulated deemed Modvat credit in the changed levy regime, and whether the departmental objections based on Notification No. 85/87-CE, limitation, and omission to specify the relevant quarter justified rejection of the refund claim.

Analysis: The refund was upheld on concurrent findings that the assessee had exported goods and had accumulated deemed credit which could not be adjusted after the introduction of the compounded levy scheme for textiles. Notification No. 29 of 1996 was read as permitting refund where the manufacturer or exporter was unable to utilize the credit for any reason, and the expression was treated as wide enough to cover the inability created by the new levy regime. The objection based on Notification No. 85/87-CE was rejected in view of the factual position that the refund claim arose only when the credit could no longer be utilised. The omission to mention the relevant quarter was treated as a curable defect, and no infirmity was found in the appellate orders.

Conclusion: The refund claim was held allowable and the departmental challenge failed.

Final Conclusion: No substantial question of law arose from the concurrent factual and legal findings, so the revenue's appeal did not succeed.

Ratio Decidendi: Where accumulated credit cannot be utilised because of a change in the duty regime, a refund provision expressed in broad terms may be applied to allow cash refund, and a mere procedural omission in the claim will not justify rejection if it is curable.

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