2018 (3) TMI 755 - AT - Central Excise

Refund claim for unspent advance deposit lying balance in PLA - rejection on the ground of time limitation - Held that - It is departmental officers, who were advising the appellant throughout this period and finally advised to file a formal refund claim. In these circumstances, it cannot be said that there is delay on the part of the appellant in the facts of the present case. Moreover, the refund is in respect of unspent balance of PLA, it is to be kept in mind that the PLA balance is not duty for the reason that whenever Challan is deposited it is as advance deposit towards PLA and from that amount duty payable is debited, therefore unspent balance is nothing but unutilised advance deposit made by the appellant. In case of claiming refund of unspent balance of PLA, limitation of one year shall not apply. Refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim time bar under Section 11B.

Analysis:
The appellant surrendered their registration certificate and shifted their unit, leading to an unutilized balance in their personal ledger account. They sought to transfer this balance to their new unit, which was initially allowed by the Superintendent. However, a subsequent communication directed the appellant to file a refund claim for the unspent advance deposit and deposit the amount along with interest. The appellant complied and filed a refund claim, which was rejected by the adjudicating authority as time-barred under Section 11B.

Appellant's Argument:
The appellant contended that they had been pursuing the refund claim since the closure of their factory, following the directions of departmental officers. They argued that the date of filing should be considered from when they requested the transfer of the balance, not from the formal refund claim in 2014. They emphasized that the refund pertained to the unspent PLA balance, which should not be subject to the one-year limitation.

Revenue's Position:
The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order, maintaining that the refund claim was time-barred.

Judgment:
After considering both sides' submissions and the records, the Member (Judicial) noted that the appellant had been seeking a refund of a small amount since the closure of their factory, following the advice of departmental officers. The Member observed that the appellant's claim should be considered as filed from the time of their initial request to transfer the balance. Additionally, it was highlighted that the unspent balance in the PLA was essentially an unutilized advance deposit, not duty. Therefore, the limitation of one year for claiming a refund of unspent PLA balance did not apply. The Member distinguished a cited case involving duty refund from the present scenario, where the refund was related to the unspent balance of PLA. Consequently, the Member held that the refund claim was not time-barred and directed it to be sanctioned to the appellant, setting aside the impugned order and allowing the appeal.