Cenvat credit refund on waste-linked inputs in export manufacture was held not admissible under Rule 5.

Rule 5 of the Cenvat Credit Rules, 2002 permits refund of unutilized credit relatable to inputs used in export goods where adjustment is not possible, subject to prescribed conditions. The dispute concerned whether credit attributable to inputs found in waste generated during manufacture of export goods could also be refunded. The record showed that the inputs were used in the manufacture of export goods, but the Rules contained no express exclusion for waste-related input credit. On that basis, the refund claim on inputs attributable to waste was held not admissible.

---

---

Issues: Whether refund of unutilized Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2002 is admissible in respect of inputs attributable to waste generated during manufacture of export goods.

Analysis: Rule 5 permits refund of Cenvat credit relatable to inputs used in final products cleared for export where adjustment is not possible, subject to the prescribed safeguards, conditions and limitations. The disputed refund related to credit claimed on the portion of inputs found in waste generated during manufacture. The record showed no dispute that the inputs were used in the manufacture of export goods, but the Rule contained no specific prohibition against refund merely because a portion of the inputs was found in waste. In the absence of any express exclusion under the Rules, the claim for refund on such attributable credit could not be denied.

Conclusion: The refund claim on inputs attributable to waste was not admissible, and the appeals were dismissed.

---