Case Law Details
Reckitt Benckiser Healthcare India Pvt. Ltd. Vs Commissioner of Central Goods and Service Tax (CESTAT Chandigarh)
PLA (Personal Ledger Accounts) 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 of the Central Excise Act, 1944 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 Co-operation Ltd. V/s. CCE, New Delhi, 2010 (256) ELT 232 (P&H) 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.
CESTAT held that appellant are eligible for the refund claim of unutilized balance lying in their PLA (Personal Ledger Accounts) and the appeal is accordingly allowed with consequential relief, if any, as per law.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
This appeal has been filed challenging the Order-in-Appeal dated 17/01/2022 passed by the Commissioner (Appeals) by which the learned Commissioner rejected the refund claim of the appellant being time barred.
2. The issue involved in this appeal is whether the refund of Rs. 5,83,392/- filed by the appellant on account of unutilised PLA (Personal Ledger Accounts) balance lying in their Central Excise Accounts as on 30/06/2017 which has been filed in the year 2021 is barred by limitation in view of section 11B of the Central Excise Act, 1944?
3. The brief facts leading to the filing of instant appeal are stated in brief as follows. The appellant was having PLA balance of Rs.5,83,392/- in their Central Excise Accounts as on 30/06/2017. They applied for refund of the aforesaid PLA balance with the DC, CGST Division, Baddi on 09/06/2021 which is after more than one year from the relevant date i.e. 30/06/2017. Resultantly a show cause notice dated 29/06/2021 was issued to the appellant as to why aforesaid refund claimed should not be rejected u/s. 11B ibid. The Adjudicating Authority vide Order-in Original dated 07/09/2021 rejected the refund on ground of time barred as prescribed under section 11B (1) ibid read with section 142(3) of CGST Act, 2017. On appeal filed by the appellant, the learned Commissioner also rejected the appeal on the ground of limitation and held that as prescribed u/s. 11B the limitation period is one year, whereas the appeal has been filed much belatedly and otherwise also under the provision of the limitation Act, 1963 also the appeal is barred by limitation.
4. I have heard learned Counsel for the appellant and learned Authorised Representative on behalf of Revenue and perused the case records including the written submission and the case laws cited by respected sides. The main thrust of the learned Authorised Representative for Revenue is on the decision of the Principal Bench of the Tribunal in the matter of M/s. KEC International Ltd. (Jaipur) V/sCommissioner, C.E. & CGST (Jaipur);2021-TIOL-174-CESTAT-Del in which also the refund of PLA amount has been rejected on the ground of limitation. Relying upon the said decision and some more decisions learned Authorised Representative prayed for dismissal of appeal. Whereas learned Counsel for the appellant drew my attention to the subsequent decision of the same Hon’ble Member on the identical issue in the matter of M/s. WMW Metal Fabrics Ltd. V/s Commissioner, CGST, Jaipur-1; 2021-TIOL—498-CESTAT-Del. in which the issue of refund of un-utilised PLA amount was granted by the Tribunal. The relevant portion of the said decision is extracted as under:-
“xxx xxx xxx
7. It is also the fact that on 1st July, 2017 the new Act of Goods and Service Tax Act (GST) was rolled down. Section 142 (3) of the said act permits the refund of any amount other than duty, tax, interest or Cenvat Credit has to be paid to the assessee in cash. Accordingly, I hold that the amount in question was appellant’s own money and he was fully entitled to get the refund of the same that too in cash. This amount cannot been made subjected to any other appropriation. Nor the time limit under Section 11B of CEA can be invoked when such money is sought to be refunded ……………”
5. According to me the issue involved hereinis no more resintegra in view of various decision of this Tribunal on this issue, including the decision in the matter of M/s. WMW Metal Fabrics Ltd (supra). In the matter of Fluid Controls Pvt. Ltd. V/s. CCE & ST, Pune-; 2018 (364) ELT 1041 (Tri-Mumbai),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. Similarly, in the matter of Josts Engineering Company Ltd. V/s. CCE, Belapur; 2018 (364) ELT 1039 (Tri-Mumbai) the Tribunal while allowing the refund of un-utilised balance of PLA of the appellant therein held as under:-
“4. ………………….. 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. The judgement in case of Collector of C.E., Chandigarh v. Doaba Co-operative Sugar Mills [1988 (37) E.L.T. 478 (S.C.)] cited by the Ld. Commissioner (Appeals) in his order is not applicable in the present facts of the case for the reason that in the said case refund was in respect of duty paid whereas in the facts of present case refund is in respect of unspent balance of PLA. As per my above discussion, I hold that refund claim of the appellant is not time bar and the same is liable to sanctioned to the appellant. Accordingly, impugned order is set aside and the appeal is allowed.”
Even the Hon’ble High Court of Punjab and Haryana at Chandigarh which is the jurisdictional High Court, in the matter of Indian Oil Co-operation Ltd. V/s. CCE, New Delhi, 2010 (256) ELT 232 (P&H) 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.
6. In the light of the discussions made herein above, I am of the considered view that the appellant are eligible for the refund claim of unutilized balance lying in their PLA (Personal Ledger Accounts)and the appeal is accordingly allowed with consequential relief, if any, as per law.
(Pronounced in open Court on 08.07.2022)
