CENVAT refund claims need proof of pre-debit compliance before filing, and insufficient evidence makes the refund inadmissible.

Refund under rule 5 of the CENVAT Credit Rules, 2004 for accumulated credit linked to export of services required proof of compliance with the prescribed pre-debit condition in paragraph 2(h) of the scheme. The returns showing write-off or closing balances were insufficient to establish that the claimed credit remained available and had been validly debited before the refund claim. As the record did not show substantive compliance with the mandatory debit requirement, the procedural objection was not cured and the refund was held inadmissible.

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Issues: Whether the refund claim under rule 5 of the CENVAT Credit Rules, 2004 could be allowed despite non-production of convincing proof that the claimed amount was debited in the CENVAT credit account before the claim and whether the alleged procedural lapse was shown to be rectified by substantive compliance.

Analysis: The claim arose under the refund mechanism for accumulated CENVAT credit relatable to export of services. The notification governing the scheme required compliance with the prescribed conditions, including the pre-debit requirement reflected in paragraph 2(h). The evidence relied upon by the appellant, namely the returns showing write-off or closing balances, was held insufficient to establish continuous availability of the credit amount from the date of claim till the claimed write-off. The record did not demonstrate that the mandatory debit condition had been satisfied in a manner consistent with the scheme, and the authorities below were not found to have acted perversely in insisting on proof of compliance.

Conclusion: The failure to establish compliance with the debit requirement was fatal on the facts, and the refund was not admissible. The appeal was therefore rejected in favour of the Revenue.

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