2022 (7) TMI 652 - AT - Central Excise

Refund claim of unutilised PLA (Personal Ledger Accounts) balance lying in their Central Excise Accounts as on 30/06/2017 - barred by limitation in view of section 11B of the Central Excise Act, 1944 or not - HELD THAT - The issue involved hereinis no more res integrain view of various decision of this Tribunal on this issue, including the decision in the matter of M/S. WMW METAL FABRICS LIMITED VERSUS COMMISSIONER, CGST, JAIPUR-I 2021 (8) TMI 657 - CESTAT NEW DELHI , it has been held by the co-ordinate Bench of the Tribunal that the PLA deposits are mere deposits for the purpose of their utilisation in the future and the same is not duty, in which case the provision of section 11B would not apply and if the same is not in a position to utilise, the depositor has to be held as the owner of the said amount which is required to be refunded to them in the absence of any limitation prescribed under the Act for such refunds. Even the Hon ble High Court of Punjab and Haryana at Chandigarh which is the jurisdictional High Court, in the matter of INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., NEW DELHI 2010 (4) TMI 625 - PUNJAB HARYANA HIGH COURT while deciding the issue about applying the limitation prescribed u/s. 11B ibid on un-utilised PLA balance has held that the rejection of application of claimant by the Central Excise Authorities on the ground that the application has been filed beyond the prescribed period from the date of crediting the amount in their personal ledger accounts cannot be sustained because the State cannot enrich itself unjustly when no duty was liable to be paid by the petitioner therein. The appellant are eligible for the refund claim of unutilized balance lying in their PLA (Personal Ledger Accounts) - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection on grounds of being time-barred under section 11B of the Central Excise Act, 1944.

Analysis:
The appeal challenged the rejection of a refund claim by the Commissioner based on being time-barred under section 11B of the Central Excise Act, 1944. The appellant sought a refund of Rs. 5,83,392/- for unutilized PLA balance in their Central Excise Accounts as of 30/06/2017, filed in 2021. The Adjudicating Authority and the learned Commissioner rejected the refund claim citing limitation under section 11B (1) of the Act, along with provisions of the CGST Act, 2017. The main argument revolved around whether the appeal was filed beyond the prescribed time limit of one year, as per section 11B, and if the limitation under the Limitation Act, 1963 also applied.

The Tribunal considered various decisions, including one where a similar refund claim was rejected on grounds of limitation. However, the appellant cited a subsequent decision where a refund for unutilized PLA amount was granted by the Tribunal. The Tribunal noted that PLA deposits are not considered as duty and are meant for future utilization, hence section 11B would not apply to such refunds. Other cases were also referenced where refunds for unutilized PLA balances were allowed, emphasizing that the depositor is the rightful owner of the amount to be refunded in the absence of specific limitations. The High Court's decision further supported this stance, stating that unjust enrichment by the State when no duty was liable should not be allowed.

In light of the discussions and precedents, the Tribunal held that the appellant was eligible for the refund claim of unutilized balance in their PLA. Consequently, the appeal was allowed, granting the appellant the relief sought, as per the law.

This judgment provides clarity on the eligibility for refunds of unutilized PLA balances, emphasizing that such amounts are not considered duty and should be refunded to the depositor without being subject to the limitations under section 11B of the Central Excise Act, 1944.