2022 (4) TMI 1105 - AT - Service Tax

Refund of unutilized deposit lying in Personal Ledger Account (PLA) - rejection on the ground of time bar - HELD THAT - In the first place, that the Revenue has nowhere disputed appellant s claim as regards its claim that the refund it sought was nothing but the one lying in their PLA, unutilized, which was to be utilized by them towards future duty, at the time of clearance of their final product. It is also not in dispute that with the introduction of GST from 01/07/2017, the appellant s deposit in their PLA remained unutilized and hence, the refund of the same was rightly claimed. When an amount is deposited to PLA, to be appropriated towards duty which may fall due in future and there having no appropriation, the same does not pass on to the Government unless the goods are cleared, and the duty is levied, such money lying deposited in PLA cannot be utilized. With the introduction of GST from 01/07/2017, such utilization was ruled out and hence, what the appellant sought was its own money. Further, Section 11B prescribes time limitation for claiming refund of duty interest, if any, paid. In the Order-in-Original, even though Appellate Authority observed that the appellant filed a refund claim of ₹ 20,38,157/- which was the advance cash balance lying in their PLA as on 30/06/2017, but later, in the same order, has proceeded tangentially, to hold that there were lack of supporting documents, to hold that the appellant s claim was for refund of Advance Cash Payment and has tried to justify the same, finally though, rejection has been made on the ground that refund claim was made beyond one year s time limitation under Section 11B ibid. When the deposit in PLA is not disputed, the authorities cannot treat the same, just to reject a valid and rightful claim, as anything other than deposit. Though an attempt is made to give a different colour to the deposit , but justification is not forthcoming, with due support of any valid documents, anywhere in the orders of lower authority. The appellant s claim for refund of their deposit lying unutilized in their PLA is perfectly valid, which being not a duty, time limit prescribed under Section 11B ibid. could not apply. The denial of the same is held unsustainable being contrary to the settled position of law - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim of a deposit in Personal Ledger Account (PLA) rejected as time-barred.

Analysis:
The appellant filed a refund application for a deposit in their PLA, unutilized, which was rejected as time-barred. The rejection was based on the ground that the refund claim was made beyond the one-year time limitation under Section 11B. However, it was undisputed that the deposit in the PLA remained unutilized due to the introduction of GST, and the appellant sought a refund of their own money. The Tribunal noted that the authorities could not reject a valid claim by treating the deposit as something other than what it was. The Tribunal cited a previous judgment to support this view. It was concluded that the appellant's claim for a refund of the unutilized deposit in their PLA was valid and not subject to the time limit under Section 11B. The denial of the refund claim was deemed unsustainable and contrary to established legal principles.

The Tribunal found that the appellant's claim for a refund of the unutilized deposit in their PLA was legitimate and not subject to the time limit prescribed under Section 11B. The rejection of the refund claim on the grounds of being time-barred was overturned, and the appeal was allowed with any consequential benefits as per the law. The impugned order and rejection were set aside, and the appellant prevailed in their appeal.