The Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has ruled that, Deposit in Profit & Loss Account is not ‘Duty’, Provisions of Section 11A of the Central Excise Act does not apply.
The Refund application claiming a refund of a deposit lying in Personal Ledger Account (PLA), unutilized, was made on 14/12/2018 by the appellant, M/s Marketing Communication and Advertising Ltd. The Revenue rejected the request by holding that the application is time-barred.
The Tribunal bench comprising Shri P Dinesha, Judicial Member observed that with the introduction of GST from 01/07/2017, the appellant’s deposit in their PLA remained unutilized and hence, the refund of the same was rightly claimed.
“When an amount is deposited to PLA, to be appropriated towards duty which may fall due in future and there having no appropriation, the same does not pass on to the Government unless the goods are cleared, and the duty is levied, such money lying deposited in PLA cannot be utilized. With the introduction of GST from 01/07/2017, such utilization was ruled out and hence, what the appellant sought was its own money,” the bench observed.
The bench noted that Section 11B prescribes time limitation for claiming refund of duty & interest, if any, paid.
“When the ‘deposit’ in PLA is not disputed, I am of the view that the authorities cannot treat the same, just to reject a valid and rightful claim, as anything other than the deposit. Though an attempt is made to give different colour to the ‘deposit’, but justification is not forthcoming, with due support of any valid documents, anywhere in the orders of lower authority. My above view is supported by the Final Order of Mumbai Bench of CESTAT in the case of Fluid Controls Pvt. Ltd. Vs. CCE, Pune – 2018 (364) E.L.T. 1041 (Tri.-Mumbai),” the Tribunal said.
Concluding the order, the Tribunal held that “In view of the above discussions, I am of the clear view that the appellant’s claim for refund of their ‘deposit’ lying unutilized in their PLA is perfectly valid, which being, not a duty, the time limit prescribed under Section 11B ibid. could not apply. The denial of the same is held unsustainable being contrary to the settled position of law.”
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