Modvat refund cannot be denied for AR-4 lapse when the export claim is otherwise valid on merits.

Refund of accumulated Modvat credit on export goods could not be denied merely because the exporters did not follow the AR-4 procedure. The governing principle applied was that procedural requirements cannot defeat a substantive entitlement when the claim is otherwise admissible on merits. Supporting export documents and the cited Tribunal precedent were sufficient to sustain relief, so non-production of AR-4 alone was not a valid ground to reject the refund. The denial of refund solely for procedural non-compliance was therefore unsustainable, and the appeals were allowed in favour of the assessee.

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Issues: Whether refund of accumulated Modvat credit on export goods could be denied solely for non-compliance with the AR-4 procedure, despite the claim being otherwise admissible on merits.

Analysis: The refund claims were rejected only on the ground that the exporters had not followed the AR-4 procedure. The governing principle applied was that procedural requirements are not meant to defeat a substantive entitlement. Since the refund was otherwise admissible on merits, the absence of AR-4 documents by itself was not a valid basis to refuse relief, especially where the exports were supported by other acceptable documents and the issue stood covered by the cited Tribunal precedent.

Conclusion: The denial of refund on the sole ground of non-observance of AR-4 procedure was unsustainable, and the appeals were allowed in favour of the assessee.

Final Conclusion: Procedural non-compliance could not override the substantive entitlement to refund of accumulated Modvat credit on export goods.

Ratio Decidendi: A substantive tax refund or credit entitlement cannot be denied merely for failure to follow a procedural formality when the claim is otherwise admissible on merits.

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