In a relief to taxpayers who are waiting for the refund of balance in the personal ledger account (PLA) after the introduction of GST, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the balance amount maintained in PLA is not in the nature of “excise duty” and therefore, the limitation under the provisions of section 11B of the Central Excise Act, 1944 is not applicable.
The appellant, Sun Pharmaceutical Industries Ltd has contended that they are entitled for refund of unspent balance of Personal Ledger Account (PLA) due to change in taxation regime from central excise to GST with effect from 01.07.2017 and whether the limitation as provided under section 11 B is applicable in the case of refund of unspent PLA Balance.
Mr. Ramesh Nair (Judicial Member) has observed 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.”
Quashing the impugned order, the CESTAT concluded that “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.”
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