Refund of accumulated deemed Modvat credit was allowed where the compounded levy scheme blocked utilisation under the new levy regime.

Refund of accumulated deemed Modvat credit was held admissible where the compounded levy scheme prevented utilisation of the credit. The provisions governing refund and the related notification procedure were construed broadly, and the phrase "for any reason" was read to include non-adjustment of credit caused by the shift in levy regime. The refund claim, arising from export-related accumulation, was therefore not defeated by the inability to set off the credit under the new scheme. The limitation objection was not a basis for rejection because it had not been relied on by the adjudicating authority.

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Issues: Whether refund of accumulated deemed Modvat credit was admissible when the compounded levy scheme prevented utilisation of such credit.

Analysis: The refund claim arose from credit accumulated on exports, and the introduction of the compounded levy scheme made adjustment of the credit impossible. The cited provisions governing refund and the notification procedure were construed broadly, and the expression "for any reason" was treated as wide enough to cover non-adjustment of credit caused by the change in levy regime. The limitation objection was not pressed as a basis for rejection since the adjudicating authority had not relied upon it.

Conclusion: Refund of the accumulated deemed Modvat credit was admissible, and the Revenue's challenge to the appellate order failed.

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