Refund under MODVAT-linked export rules cannot be denied merely because duty was paid through RG 23A Part II credit.

Refund under Rule 57F(3) could not be denied merely because duty on exported goods was paid through RG 23A Part II credit instead of PLA. The Tribunal held that the governing provision and notification did not restrict refund to duty discharged only through PLA, and that goods which had already suffered full duty remained eligible for the refund otherwise admissible under the MODVAT-linked scheme. The supplier's operation under the DEEC scheme did not by itself disqualify the respondent. The refund claim was therefore sustained and the appeal failed.

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Issues: Whether refund under Rule 57F(3) could be denied merely because the duty on the exported goods was paid by debiting RG 23A Part II instead of PLA, including where the supplier of the cans was operating under the DEEC scheme.

Analysis: The refund claim arose in respect of exported goods on which duty had been discharged. The Tribunal held that Rule 57F(3) and the notification issued thereunder did not warrant restricting refund only to duty paid through PLA. The fact that the supplier of the cans had paid duty by using MODVAT credit in RG 23A Part II did not alter the position, because the goods received by the respondent had already suffered full duty. The circumstances of the supplier working under the DEEC scheme did not disentitle the respondent from the refund otherwise admissible under the MODVAT-linked scheme.

Conclusion: The refund could not be denied on the ground that duty had been paid through RG 23A Part II, and the claim was admissible in favour of the assessee.

Final Conclusion: The appeal failed and the refund granted to the respondent was sustained.

Ratio Decidendi: Where exported goods have suffered duty and the governing provision does not confine refund to duty paid through PLA, refund cannot be denied merely because the duty was discharged through RG 23A Part II credit.

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