Ashok Jindal
1. The appellant is in appeal against the impugned order wherein refund filed by the appellant has been denied by the learned Commissioner
(Appeals).
2. The facts of the case are that the appellant is manufacturer of excisable goods namely Insulated Wire, Cable and Copper Wire of Refined Copper.
The appellant transferred an amount of Rs.2,88,452/- as transitional credit through TRAN â€" 1 in the GST regime. During the verification of TRAN-
1, it was observed that as per Section 140(4)(a), the taxpayer shall be entitled to take, in is electronic credit ledger the amount of Cenvat credit carried
forward in return furnished under the existing law in accordance with the provisions of sub-section(1) and as such there is no provisions contained
under the CGST Act, 2017 and Rules made thereunder to transfer PLA balance in the electronic credit ledger. Therefore, the appellant was asked to
deposit the said wrongly availed input tax credit equivalent to PLA balance along with interest, and in compliance, the appellant has deposited the
excess claimed Rs.2,88,452/- vide debit entry no. 1562 dated 16.02.2009 in their electronic credit ledger and shown in the GSTR-3B for the month of
February, 2019 but did not deposit the interest which contravenes the provisions of Section 73(5) of the CGST Act, 2017. Thereafter, the appellant
filed a refund claim of Rs. 2,88,452/- on 25.02.2021 in respect of amount pertained to the closing balance in their personal ledger in ER return for June,
2017. The adjudicating authority sanctioned the refund calim on account of unspent amount of PLA holding that refund involves refund of PLA
balance which was considered to be deposit and not duty. Therefore, it was held that provisions of Section 11B are not applicable and consequently, it
was held that refund claim cannot be held time barred. Revenue challenged the order of the adjudicating authority before the learned Commissioner
(Appeals) on the ground that refund claim filed by the appellant is barred by limitation. The learned Commissioner (Appeals) relying on the decision of
Commissioner of Income Tax II Vs. Modipon Ltd. in Civil Appeal No 19763 of 2017 vide order dated 24.11.2017 held that the amount deposited in
PLA is duty, therefore, provisions of Section 11B of Central Excise Act, 1944 are applicable to the facts of the case and refund claim filed by the
appellant is barred by limitation. Against the said order, the appellant is before me.
3. Learned counsel appearing on behalf of the appellant submits that for deposit in the PLA provisions of Section 11B are not applicable and unutilized
PLA balance is not hit by limitation. He relied upon the decision of this Tribunal in the case of Huhtamaki India Limited Vs. Commissioner of Central
Excise & ST, Daman vide Final Order No. A/10263/2023 dated 07.02.2023 wherein it was held that for refund of unutilized PLA balance is not hit by
limitation provided under Section 11B of Central Excise Act, 1944 and same is to be treated as deposit. Therefore, he prayed for impugned order to be
set aside.
4. On the other hand, Learned Authorized Representative oppose the contention of the appellant and heavily relied on the impugned order and the
judgment of the Hon’ble Apex Court if the case of Modipon Ltd. (supra)
5. Heard both sides and considered the submissions.
6. I have gone through the decision of Hon’ble Apex court in the case of Modipon Ltd. (supra). In the said case also the Hon’ble Apex Court
has not held that any amount lying pending in PLA is a central excise duty. In fact, the Hon’ble Apex Court itself has held that same is a deposit
which can be utilized later on for payment of Central Excise Duty. As the learned Commissioner (Appeals) has misinterpreted the decision of the
Hon’ble Apex Court in the Modipon Ltd. (supra), therefore the said decision is not applicable to the facts of this case and further this Tribunal in
the case of Huhtamaki India Limited (supra) observed as under:
4. I have carefully considered the submissions made by both the sides and perused the record. The limited issue falls for my consideration is
that 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. I find 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 Limited (supra) and passed the following order:-
4. I have carefully considered the submission made by both sides and perused the records. I find 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. I find 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. This tribunal in various
decisions held as under:-NAVDEEP PACKAGING INDUSTRIES â€" 2007 (210) ELT 417 (TRI. MUMBAI)
“Heard both sides.
2.The issue involved is whether the refund of unspent PLA balance is covered under Section 11B of the Central Excise Act, 1944. The ld.
Commissioner (Appeals) in his order has considered the provisions of Rule 9(1A) read with Rule 173G(1A) of the Central Excise Rules,
1944 which provides fur withdrawal of amount from PLA by the Commissioner and the said power of Commissioner has been delegated to
Assistant/Deputy Commissioner of Central Excise. The contentions of the ld. Consultant for the appellant is that Section 11B of Central
Excise Act, 1944 applies for refund of duty. This is not disputed by the Commissioner (Appeals). However, referring to clause (b) of the
proviso to subsection (2) of Section 11B, the Commissioner records that unjust enrichment shall not apply to refund of unspent PLA
balance, but at the same time he also records that he does not mean that the unspent PLA balance is duty. He has recorded that the said
provision has been incorporated as an abundant precaution to ensure that even by mistake, the provision of unjust enrichment is not
applied for such refund. He also records 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. He has, therefore, recorded that the provisions of Section 11BB of the Central Excise Act,
1944 granting interest for delayed refund of duty is not attracted in the present case.
3.After hearing, perusal of the records and relevant provisions as mentioned above, I do not find any legal infirmity in the Order passed by
the Commissioner (Appeals) so far as the applicability of Rule 9(1A) and Rule 173G(1A) of the Central Excise Rules, 1944, is concerned.
The appeal filed by the appellant is, therefore, dismissed.â€
JAY SHREE TEA & INDUSTRIES LTD â€" 2005 (190) ELT 106 (TRI.-KOLKATA)
“3. Ld. JDR supports the impugned order. A clarification was issued by the Board regarding refund of balance in PLA Account. The
matter was examined in consultation with the Ministry of Law and it was advised by the Ministry that the amount in question may therefore
be refunded to the applicant. CBE & CE No. 202/24/72-CX.6, dated 6-1- 1973. The PLA is deposited by the party is adjusted from time to
time and as such an amount in PLA which remain unutilized belonging to the party for which the Department has no claim and the limitation
has no application on such deposit. The Rule 173G (1A) deals with the procedure to be followed by the assessee for withdrawal of money
from PLA is as under :- “Where an assessee keeping an account-current under subrule (1) makes an application to the [Commissioner]
for withdrawing an amount from accountcurrent, the [Commissioner] may, for reasons to be recorded in writing permit such assessee to
withdraw the amount in accordance with such procedure as the [Commissioner] may specify in this behalf.â€
It is clear that for withdrawing an amount from such account-current only requires a permission from the Commissioner concerned. Neither
the law of limitation nor the theory of unjust enrichment is applicable on such deposit. It is the money belonging to the appellant and has a
right to withdraw it. There is a distinction between the amount appropriate towards duty and amount deposited for payment of a duty. In a
former case duty which has only been levied and paid evidently becomes the property of the Government and no person would be entitled to
get it back unless there is a provision of law to enable that person to get the duty already appropriated back from the State or the
Government. In the latter case, however, when an amount has been deposited to be appropriated thereafter towards duty which may fall due
there having no appropriation, the property in money does not pass to the Government unless the goods are cleared and the duty is levied.
In present case the money deposited in PLA cannot be utilised due to withdrawal of Central Excise duty on Package Tea and Tea including
Tea waste. The money belongs to the appellant over which the Department has no claim. The appeal deserves to be allowed. I therefore
allow the appeal with consequential benefit to the Appellant.†BIJALIMONI TEA ESTATE â€" 2007 (215) ELT 63 (TRI.- KOLKATA)
“Ld. Counsel appearing for the appellants has submitted that there is only limited issue in these appeals to examine whether un-utilised
deposit in PLA can be refunded to the depositor or not and whether such deposit is covered by Section 11B of the Central Excise Act, 1944.
2. Facts of the case throws light that the appellants had made deposit of Rs. 50,000/- (Rupees Fifty thousand only) on 31-12-02 in United
Bank of India (UBI), Siliguri towards discharge of the duty payable for removal of excisable goods. On 28-2-03, there was an un-utilised
deposit amount of Rs. 14,251/- to the credit of the appellants and when the appellants made an application for refund of such amount by
virtue of exemption of duty on Tea & Tea Waste w.e.f 1-3-03, the claim of the appellants was denied.
3. Ld. DR for the Revenue submitted that if any refund of duty is claimed under Central Excise Act, 1944, due process of law as required
under Section 11B of Central Excise Rules, 1944, should be followed and the authorities have rightly rejected claim for the appellant.
Meeting to such point, the ld. Counsel has submitted that the Central Board of Excise & Customs has already issued instruction vide F. No.
202/24/72-CX. 6, dated 6-1-78, in consultation with the Ministry of Law to the effect that un-utilised amount in PLA is refundable to the
appellants and relying on this instruction, the appellant submitted that this Bench has already decided such matter in the case of Jay Shree
Tea & Industries Ltd. v. Commissioner of Central Excise, Kolkata reported in 2005 (190) E.L.T. 106 (Tri.-Kolkata).
4. On the basis of the above decision, the appellants cannot be denied of justice and cannot be un-equally treated under law. It is judicial
descipline that demands that unless that order of this forum is stayed by higher Courts or reversed by any such Court, order of this forum
shall prevail and that should be followed unhesitatingly. I am inclined to agree to uphold majesty of law and follow judicial discipline and
allow the appeal since the issue is no more res integra.
5. Both the appeals are allowed.†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.
5. As regard the decision cited by Learned AR in the case of Valson Polyester Ltd (Supra) on careful reading of the said decision I find that
the said decision was passed without considering the earlier decisions of this Tribunal as cited above and also the board circular was not
considered in the said judgment. Therefore, the Valson Polyester Ltd is not a good law and same is distinguished.
6. As per above discussion and finding, impugned order is set aside and appeal is allowed with consequential relief, if any, in accordance
with law.
5. In view of the above decision of the Tribunal, which is on identical facts and issue, the issue is no more res-integra. Accordingly, the
impugned order is set-aside and the appeal is allowed with consequential relief.
7. Following the decision of this Tribunal in the case of Huhtamaki India Limited (supra), I hold that the provisions of Section 11B are not applicable
for deposit lying in PLA account for refund and same is to be treated as deposit.
8. In view of that I set aside the impugned order and allowed the refund of the appellant. In these terms, impugned order is set aside and appeal is
allowed with consequential relief, if any.
[Dictated and pronounced in the open Court]
