2021 (8) TMI 657 - AT - Central Excise

Refund of cash amount deposited in PLA account - time limitation of period of one year from the relevant date i.e. the date of account current balance as on 30th June 2017 - Section 11B of Central Excise Act 1944 - HELD THAT - It is an admitted fact that appellant was having account current/ PLA for payment of duty. It also cannot be disputed that the purpose of such account is that the money deposited by the assessee in such account has to be debited there-from as and when the duty for clearance of goods is required to be paid by the assessee i.e. against a liability that has to reckon in future. Admittedly the closing balance of said PLA account as on 30th June 2017 was Rs. 2, 02, 162/-. Admittedly as on 30.07.2017 the duty liability of appellant for the impugned period was discharged and the aforesaid amount was appellant s money to be adjusted against any duty liability arising after 01.07.2017 - the amount in question was not at all the amount of duty or interest it was rather appellants own amount which either could be utilized by him while discharging his duty liability else the appellant was entitled to get the refund thereof. It is also the fact that on 1st July 2017 the new Act of Goods and Service Tax Act (GST) was rolled down. Section 142 (3) of the said Act permits the refund of any amount other than duty tax interest or Cenvat Credit has to be paid to the assessee in cash - the amount in question was appellant s own money and he was fully entitled to get the refund of the same that too in cash. This amount cannot been made subjected to any other appropriation. Nor the time limit under Section 11B of CEA can be invoked when such money is sought to be refunded. The Commissioner (Appeals) has wrongly invoked the Section 11 B of CEA and the concept of limitation embodied in the said section - appeal allowed.

Summary

Issues:
1. Appeal against rejection of refund claim based on limitation under Section 11B of Central Excise Act, 1944.
2. Interpretation of whether the amount in question was a duty or the appellant's own money.
3. Application of Section 11B regarding refund of amounts deposited in PLA account.
4. Impact of transition to Goods and Service Tax Act (GST) on refund claims.
5. Precedents regarding refund of amounts deposited in PLA account.

Analysis:
1. The appeal challenged the rejection of a refund claim by the Commissioner (Appeals) based on the limitation under Section 11B of the Central Excise Act, 1944. The appellant, engaged in manufacturing, filed a refund claim for an amount deposited in their PLA account, which was rejected due to being beyond the one-year limitation period from the relevant date.

2. The appellant argued that the amount in question was not a duty but their own money deposited in the PLA account, which they could withdraw at any time. The Department contended that the application fell under Section 11B, which mandated filing within one year from the relevant date, i.e., the closing balance date.

3. The Tribunal considered the purpose of the PLA account for duty payment and noted that the amount in question was the appellant's own money, not duty or interest. It was to be adjusted against future duty liabilities, and the appellant was entitled to a refund if unutilized. The Tribunal distinguished between duty appropriated and deposited for future duty, asserting the appellant's ownership of the latter.

4. With the transition to the Goods and Service Tax Act (GST), the Tribunal referenced Section 142(3) allowing refunds of amounts other than duty, tax, interest, or Cenvat Credit to be paid in cash. It held that the appellant was entitled to a cash refund of their own money, not subject to Section 11B's time limit, citing a Mumbai Tribunal decision and a Punjab and Haryana High Court ruling supporting such refunds without limitation.

5. Citing precedents, including decisions from the Mumbai and Calcutta Benches, the Tribunal concluded that the Commissioner (Appeals) erred in invoking Section 11B and the concept of limitation. The order was set aside, and the appeal was allowed, emphasizing the appellant's right to refund their own money from the PLA account without time restrictions.

[Order pronounced in the open Court on 16/08/2021]