EXCISE Appeal No. 10303 of 2021-SM
[Arising out of Order-in-Original/Appeal No CCESA-SRT-APPEAL-PS-181-2020-21 dated
26.02.2021 passed by Commissioner of Central Excise, Customs and Service Tax-SURAT-I]
Huhtamaki India Limited
VERSUS
Commissioner of Central Excise & ST, Daman
APPEARANCE :
Shri PK Shetty, Advocate for the Appellant
Shri Sanjay Kumar, Superintendent (AR) for the Revenue.
CORAM:
HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)
DATE OF HEARING/ DECISION : 07.02.2023
FINAL ORDER NO. A/10263 / 2023
RAMESH NAIR :
The issue involved in the present case is that 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.
Shri P.K. Shetty, learned Counsel appearing on behalf of the appellant
at the outset submits that this issue is no longer res-integra, in view of
various judgments as follows:-
(a) Sun Pharmaceutical Industries Ltd vs. CCE&ST, Daman-in appeal
No. 10105/2020-[Final Order No. A/10725/2022 dated 23.06.2022]
(b) Fluid Controls Pvt Limited vs. CCE&ST, Pune-I -2018 (364) ELT
1041 (Tri-Mumbai)
(c) Jay Shree Tea & Industries Ltd vs. CCE, Kolkata – 2005 (190) ELT
106 (Tri-Kolkata)2
Excise Appeal Nos. 10303 of 2021-SM
(d) CCE, Kolkata-VII vs. Rasoi Limited – 2008(229) ELT-33(HC-Cal) &
[2009(242)ELT A-85(SC)]
(e) Welspun India Limited vs. CCE, Rajkot – 2009 (248) ELT 566 (Tri
Ahmd)
Shri Sanjay Kumar, learned Superintendent (AR) appearing on behalf
of the Revenue reiterates the findings of the impugned order.
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:-
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 – 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 sub
section (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.”
JAY SHREE TEA & INDUSTRIES LTD – 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 account
current, 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.”
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 – 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.
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.
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).
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.
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.
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.
As per above discussion and finding, impugned order is set aside and appeal is
allowed with consequential relief, if any, in accordance with law.
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.
(Operative part of the order pronounced in the open court)
(Ramesh Nair)
Member (Judicial)
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