Order date – 29 November 2022

 Facts –

• The Appellant, Rosy Blue India Pvt Ltd trading internationally in diamonds and other precious stones, have rendered service to overseas clients and have utilised ‘taxable service’ on which credit of tax under Finance Act, 1994, as permissible, was availed and, owing to absence of domestic dealings, was constrained to opt for monetisation of such credit attributable to services deployed for undertaking export of services during the relevant quarter as provided for in rule 5 of CENVAT Credit Rules, 2004.
• The appellant made an application for refund on 6th January 2016 and 30th March 2016 respectively for the first two quarters of 2015 and on 2nd January 2017 for the first quarter of 2016 were, after issue of notice of deficiency, refund claim was allowed partly and the rest were rejected.

Issue –

• Whether the appellant is entitled to claim the refund?

Order –

• The Tribunal finds that the first appellate authority had merely held the finding of non-conformity to be incorrect insofar as the ‘service’ is concerned. At the same time, it was also held that the applicant had filed a single claim for refund even as the scheme of monetisation, in rule 5 of CENVAT Credit Rules, 2004, prescribed separate consideration for export of goods and export of services.
• The provisions in the notification for operationalizing of rule 5 of CENVAT Credit Rules, 2004 include debiting of the claim amount before submission of application for the same. There is a purpose behind this mandate: that the claimed amount would be erased from the credit account and, thus, not utilised even temporarily once monetization has been sought. The appellant has not clearly asserted, or produced evidence of, having retained that amount in balance all through.
• The credit should be reversed as and when export takes place; however, with eligibility for refund arising only upon receipt of proceeds of export and the scheme having provided for filing of claim within a year thereafter, the dilution of ideal by shift to the quarter in which the claim is preferred is acceptable approximation.
• The appellant is, squarely and singularly, responsible for failure to furnish proof of the required availability of credit till the date of write off and, in the absence of any such evidence even at this stage of appeal or even assurance of being ready and willing to do so, there is no scope for further ascertainment.
• The Tribunal place reliance on the decision of  the Tribunal in re Silicon Image Research & Development Private Limited and in BA Continuum India Pvt Ltd, wherein it was held that enumerated the principle that a rectifiable lapse in procedure should not lead to denial of refund but the outcome therein has been decided on the fact of post-claim rectification. While concurring with the principle, the Tribunal finds that, on the facts made known in this appeal, material presented before us does not support extending that outcome in this dispute.
• In view of the factual submission of the appellant not being demonstrative of substantive compliance with the condition of debit of the CENVAT credit or of promise of being able to, the other aspects of remand by the first appellate authority are rendered irrelevant.
• The appeal is dismissed.