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2023 (2) TMI 773 - AT - Central ExciseTime Limitation - Refund of unutilized PLA balance - whether in respect of refund of unutilized PLA balance, limitation of one year, provided under Section 11B is applicable from the date of deposit in PLA? - HELD THAT - The deposit in PLA is not a payment of duty whereas it is an advance deposit for future payment of duty. The PLA balance takes the color of duty only when duty payable is debited from the PLA balance. In the present case, undisputedly the PLA balance for which refund is sought for is out of advance deposit made by the appellant in PLA and out of that unutilized balance has been claimed as refund. Therefore, limitation of Section 11B is not applicable. This Tribunal considered identical issue in the case of SUN PHARMACEUTICAL INDUSTRIES LTD VERSUS C.C.E. S.T. -DAMAN 2022 (6) TMI 1176 - CESTAT AHMEDABAD has held that 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. Appeal allowed - decided in favor of appellant.
Issues involved:
Whether the appellant's refund of unutilized PLA balance is hit by limitation provided under Section 11B when the refund was claimed after one year from the date of deposit. Analysis: The issue revolves around the applicability of the limitation period under Section 11B concerning the refund of unutilized PLA balance. The appellant contends that the limitation does not apply, citing various judgments such as Sun Pharmaceutical Industries Ltd, Fluid Controls Pvt Limited, Jay Shree Tea & Industries Ltd, CCE Kolkata-VII vs. Rasoi Limited, and Welspun India Limited. The appellant argues that the deposit in PLA is not a payment of duty but an advance deposit for future duty payment. The Tribunal, in line with the precedent set in Sun Pharmaceutical Industries Limited, held that the limitation of Section 11B does not apply to unutilized PLA balance refunds, as the balance is from an advance deposit, not duty payment. The Tribunal further examined the issue in light of other judgments, such as Navdeep Packaging Industries, Jay Shree Tea & Industries Ltd, and Bijalimoni Tea Estate. These cases emphasized that the unspent PLA balance is not covered under Section 11B of the Central Excise Act, as it is not considered duty until utilized for payment. The judgments highlighted the distinction between duty levied and paid, which becomes government property, and advance deposits for future duty payment, which do not transfer ownership to the government until duty is levied. The Tribunal, aligning with these precedents, allowed the appeal for refund of PLA balance, stating that the limitation under Section 11B does not apply. Moreover, the Tribunal distinguished the case of Valson Polyester Ltd, noting that it did not consider earlier tribunal decisions or the board circular dated 06.01.1973. The Valson Polyester Ltd judgment was deemed not applicable law, as it did not align with the established precedents and relevant circular. Consequently, the impugned order was set aside, and the appeal was allowed based on the consistent interpretation that the limitation under Section 11B does not restrict refunds of unutilized PLA balance.
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