The assessee was registered under Central Excise Act and had deposited amount in its PLA for further utilization. On introduction of GST, with effect from 1 July 2017, the deposits in PLA became non-usable. CBIC clarified that only the balance in CENVAT could be transferred to GST account. There were no provisions for transfer of PLA amount in GST Act.
The assessee filed an application for refund of amount available as a closing balance in its PLA. The Adjudicating authority rejected the refund application on the ground that the application was filed beyond the period of one year from the date of deposit. The assessee filed an appeal before the Commissioner (Appeals) against the order of adjudicating authority. The Commissioner (Appeals) upheld the order-in-original passed by the adjudicating authority. The assessee filed an appeal before the Customs Excise and Service Tax Appellate Tribunal (CESTAT) seeking relief in this regard.
The tribunal relied on the judgement of Fluid Controls Pvt. Ltd. Vs. Commissioner of Central Excise & Service Tax, Pune-I wherein the tribunal held that the PLA deposit is nothing but the ‘duty waiting to be debited' and ‘not a duty under the Act’ and hence, limitation provisions would not apply to the same. If assessee is not able to utilize the PLA deposit, the depositor is entitled for refund of the same.
In the present case, if the PLA deposit could not be used on account of introduction of GST and there being no transitional provision for transfer of such PLA deposit, the amount would be refundable to the assessee. The lower authorities were wrong in rejecting the application on the ground of limitation. Further, the refund of amount deposited in PLA before GST introduction becomes admissible to the assessee only with effect from 1 July, 2017 and not before that. Therefore, the said order passed by the adjudicating authority is set aside.