21 November 2022


Customs, Excise and Service Tax Appellate Tribunal

WMW Metal Fabrics Limited vs. Commissioner, CGST -Jaipur I



Goods and Services Tax

State cannot enrich itself unjustly, when no duty was liable to be paid by Appellant

The Appellant is engaged a manufacture of Galvanized Transmission and Communication Tower Plants. A refund claim for an amount of Rs.2,01,262 was filed by the Appellant on 29th November, 2018 against the cash amount deposited in their Personal ledger Account (PLA) account, for payment of duty as shown in their current account on 30th June, 2017 and was also shown in their ER-1 Return for the month of June, 2017. However, a show cause notice was served upon the Appellant proposing rejection of the said refund claim as it appeared to be hit by the limitation of period of one year from the relevant date i.e. the date of account current balance as on 30th June, 2017. The rejection was initially confirmed vide Order-in-Original. Appeal thereof has been rejected by the Order under challenge.

It is an admitted fact that, Appellant was having account current/ PLA for payment of duty. It also cannot be disputed that the purpose of such account is that the money deposited by the assessee in such account has to be debited there-from as and when the duty for clearance of goods is required to be paid by the assessee i.e. against a liability that has to reckon in future. The amount in question was not at all the amount of duty or interest it was rather appellants own amount which either could be utilized by him while discharging his duty liability else the appellant was entitled to get the refund thereof.

There is a distinction between the amount appropriated towards duty and amount deposited for payment of a duty. In a former case, duty which has been levied and paid subsequently 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 PLA Account to be appropriated towards duty which may fall due in future and there having no appropriation, the property in money does not pass to the Government unless the goods are cleared and the duty is levied and such money lying deposited in PLA cannot be utilized. It shall be the money of assessee.

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, 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.

In the case of Indian Oil Corporation Ltd. vs. CCE, it has been held that, when there was no duty liability of the Appellant but some amounts stands deposited by him, the same has to be refunded back to the Appellant without raising any issue of limitation. It was specifically held therein that, state cannot enrich itself unjustly, when no duty was liable to be paid by the Appellant.

It is held that, Commissioner (Appeals) has wrongly invoked the Section 11 B of Section 11B of Central Excise Act, 1944 (CEA) and the concept of limitation embodied in the said section. Order is accordingly, set aside. Appeal stands allowed.

Tags : Refund Time bar Eligibility

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