Refund of unutilised deemed credit allowed where no prescribed safeguards, conditions or limitations restricted the exemption notification.

Unutilised deemed credit used in relation to export goods was held refundable under Notification No. 29/96 because the notification permits refund where credit cannot be utilised for payment of duty on final goods. The Tribunal noted that any refund restrictions were to arise only from safeguards, conditions or limitations prescribed in the official gazette, and no such restrictions had been imposed. Refund was therefore allowed and denial of the claim was found unsustainable.

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Issues: Whether the appellant was entitled to refund of unutilised deemed credit under the applicable exemption notification for grey man-made fabrics used in export goods.

Analysis: The appellant's claim was held to fall within Notification No. 29/96, which permits refund where utilisation of credit for payment of duty on final goods cannot be made for any reason. The Tribunal noted that the notification contemplates refund subject to safeguards, conditions and limitations to be specified in the official gazette, but no such restrictions had been imposed. On that basis, denial of refund was found unsustainable.

Conclusion: The refund of deemed credit was held allowable, and the impugned order was set aside in favour of the assessee.

Ratio Decidendi: Where a notification permits refund of credit that cannot be utilised for payment of duty and no qualifying safeguards, conditions or limitations have been prescribed, refund cannot be denied on that ground.

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