Substantial compliance with refund debit conditions can save a Cenvat refund claim when debit is made before adjudication.

Refund under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (N.T.) was considered in the context of exported taxable services and unutilised Cenvat credit not carried into GST. The notification requirement that the refund amount be debited at the time of filing the claim was treated as substantially complied with where the assessee debited the credit account suo motu before the show cause notice and before adjudication. The discussion applies the principle of substantial compliance and rejects a purely formal objection based only on the timing of the debit.

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Issues: Whether refund under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 27/2012-CE (N.T.) dated 18.06.2012 could be denied merely because the assessee debited the refund amount in the Cenvat credit account after filing the refund claim but before adjudication.

Analysis: The refund claims arose from exported taxable services and the assessee had not carried forward the unutilised Cenvat credit into the GST regime. The refund amount was debited suo motu in the credit account before issuance of the show cause notice and before adjudication. On these facts, the requirement that the amount claimed should be debited at the time of filing the claim was treated as having been substantially complied with. The earlier pronouncement of the Supreme Court on substantial compliance governed the issue, and a contrary approach based only on the timing of debit was found unsustainable.

Conclusion: The assessee's belated debit, made before adjudication, satisfied the notification condition in substance and the refund could not be rejected on that ground.

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