2022 (6) TMI 1176 - AT - Central Excise

Refund of unspent balance of Personal Ledger Account (PLA) due to change in taxation regime from central excise to GST with effect from 01.07.2017 - Applicability of limitation as provided under section 11 B is applicable in the case of refund of unspent PLA Balance - HELD THAT - The Learned Commissioner (Appeals) rejected the refund claim on the ground that the limitation under 11B is applicable according to which the claimant should have filed the refund within the one year from date of payment. In case of PLA balance, it is not deposited as a duty but it is deposited as advance towards the duty. The PLA Amount takes the color of excise duty only when it is utilized for payment of duty on clearance of excisable goods. The unspent balance of PLA is only advance not duty therefore, Section 11B is not applicable. The Tribunal in the case of NAVDEEP PACKAGING INDUSTRIES VERSUS COMMR. OF C. EX., AHMEDABAD-II 2006 (12) TMI 323 - CESTAT, MUMBAI has held that since there is a specific provision for refund of PLA balance under Rule 9(1A) and 173G(1A) of the said Rules, therefore, such refund would be squarely covered under the said Rules and not under Section 11B of the Central Excise Act. 1944. which applies only for refund of duty. In view of the above decision along with board circular dated 06.01.1973 the appellant is entitled for the refund of PLA balance and limitation provided under Section 11 B is not applicable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Entitlement for refund of unspent balance of Personal Ledger Account (PLA) due to change in taxation regime from central excise to GST
- Applicability of limitation under section 11 B for refund of unspent PLA Balance

Analysis:

Issue 1: Entitlement for refund of unspent balance of PLA
The appellant contended that Section 11 B is not applicable for refund of PLA Balance, citing judgments like NAVDEEP PACKAGING INDUSTRIES, JAY SHREE TEA & INDUSTRIES LTD, and BIJALIMONI TEA ESTATE. On the other hand, the Assistant Commissioner for Revenue relied on the decision in the case of VALSON POLYESTER LTD. The tribunal examined the nature of PLA balance, emphasizing that it is an advance towards duty and not deposited as duty. The tribunal referenced previous decisions to establish that the unspent balance of PLA is not considered duty, hence Section 11B does not apply. The tribunal distinguished the case of VALSON POLYESTER LTD. by noting that it did not consider earlier tribunal decisions and the relevant board circular, concluding that the appellant is entitled to the refund of PLA balance without the limitation under Section 11 B.

Issue 2: Applicability of limitation under section 11 B
The tribunal analyzed the provisions of Rule 9(1A) and Rule 173G(1A) of the Central Excise Rules, 1944, which provide for withdrawal of amount from PLA. The tribunal referenced the decision in JAY SHREE TEA & INDUSTRIES LTD, highlighting that the unutilized deposit in PLA can be refunded to the depositor without the application of Section 11B. The tribunal emphasized that the money deposited in PLA belongs to the appellant, and the department has no claim over it. The tribunal further noted that the board circular dated 06.01.1973 supports the refund of unspent PLA balance. Therefore, the tribunal set aside the impugned order and allowed the appeal, granting consequential relief in accordance with the law.

In conclusion, the tribunal ruled in favor of the appellant, holding that the unspent balance of PLA is refundable without the limitation under Section 11 B, based on the nature of PLA balance and relevant precedents. The tribunal emphasized the distinction between duty deposited and amount deposited for payment of duty, ultimately allowing the appeal and providing relief to the appellant.