2015 (10) TMI 1152 - AT - Central Excise

Denial of refund claim - Unutilized CENVAT Credit - Held that - Assessee after depositing amount of ₹ 35,00,000.00 and ₹ 15,00,000.00 in the Govt. Account, they did not make any debit in their PLA account, towards the duty liability. Instead, they debited entire amount of ₹ 77,99,763.00 and ₹ 19,29,540.00 from their Cenvat Accounts i.e. RG23A Part II vide debit entry no. 6703 and 6704 dated 09.02.2005 against ₹ 77,99,763.00 and debit entry serial No. 203 & 205 dated 09.02.2005 against ₹ 19,29,540.00. It is further observed by the Adjudicating Authority that there is no provision in the law to refund the amount deposited in the Govt. account and not debited towards the payment of duty. I find that the Commissioner (Appeals) has not disputed this fact. Thus, there is no dispute the appellant deposited the amount of ₹ 35 lakhs and 15 lakhs in respect of Unit-1 and Unit-2, which were lying in their PLA Account unutilized. The Commissioner (Appeals) proceeded on the basis that they have already debited the amount in PLA. But, there was no much allegation in the Show Cause Notices and it is contrary to the adjudication order. It is revealed from the Show Cause Notice and adjudication order that the appellant credited there amounts in their PLA account, which were not debited. The Tribunal in the case of Bijalimoni Tea Estate following the both Circular Letter F. No. 202/24/72-CX. 6, dated 0.1.1978 held that refund claim of unutilized balance in PLA is admissible. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues Involved:
Refund of unutilized balance in PLA account under Central Excise Act, 1944.

Analysis:

Issue 1: Refund of unutilized balance in PLA account under Central Excise Act, 1944.
The case involved the appellants, engaged in the manufacture of "Texturised Polyster Filament Yarn," who wrongly availed an exemption notification leading to a duty liability. The appellants deposited amounts in their PLA account but debited the duty amount from their Cenvat Accounts instead of the PLA account. The dispute arose regarding the refund claims of the unutilized balance in the PLA account. The Adjudicating Authority rejected the refund claims based on Rule 5 of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) upheld this decision. The appellants argued that the refund claims were indeed from the unutilized balance in the PLA account and relied on a Tribunal decision supporting their claim. The Revenue contended that the amounts were credited in the PLA and then debited. However, the Tribunal found that the appellants had not debited the amounts from their PLA account towards the duty liability but had debited them from their Cenvat Accounts. The Tribunal noted that there was no provision to refund amounts deposited in the Govt. account and not debited for duty payment. The Commissioner (Appeals) did not dispute this fact, and it was revealed that the appellants credited amounts in their PLA account but did not debit them. Citing the Tribunal's decision in Bijalimoni Tea Estate case, the Tribunal held that a refund claim of unutilized balance in the PLA account is admissible under the law. Consequently, the Tribunal allowed the appeals, setting aside the impugned orders and granting the refund of the unutilized balance in the PLA account to the appellants.

This detailed analysis highlights the key contentions, legal provisions, and the Tribunal's reasoning leading to the decision on the issue of refund of unutilized balance in the PLA account under the Central Excise Act, 1944.