Balance of Education Cesses in PLA - whether lapses or is refundable?
WE received this mail -
I find that DDT has championed the cause of we assessees in the matter of utilization of accumulated credit of Education Cess(es).
Nonetheless, we were disheartened to note the contents of the Para B-21 of CBEC Instruction in F.No.96/85/2015-CX.I., Dated: December 07, 2015
Reported in DDT 2741 wherein you have encapsulated the Board's decision thus -
1. It was Government's conscious policy decision to withdraw the Education Cess and Secondary & Higher Education Cess.
2. It is a policy decision to not allow utilization of accumulated credit of education cess and secondary and higher education cess after these Cesses have been phased out.
3. As these Cesses have been phased out and no new liability to pay such Cess arises, no vested right can be said to exist in relation to the accumulated credit of the past.
4. The rule and notifications as they exist need to be followed and do not need any amendment.
In a manner of sorts, we have resigned ourselves to our fate in the matter.
However, a few of our brethren had a balance of such Education cesses in their account current (PLA) and which on the fateful day of the Government exempting the Cesses remained unutilized and continue to remain so. A couple of them, after getting to know the Board decision (cited above) waited for the Union Budget but finding nothing therein filed refund claims u/s 11B of CEA, 1944, recently.
Not to mention that the departmental authorities have issued SCNs alleging time bar, we feel that the ground is inapplicable if we delve into the past Board instructions (almost three decades old, which advises a mere transfer of credit) and also a few decisions of the Tribunal.
+ Board Circular No. 7/93-CX.6 Dated 23-4-1993
Subject: Central Excise - Transfer of Credit Balance lying in Personal Ledger Account under one minor head to another minor head - Regarding.
The Board has examined the question of utilisation of credit balance of Special Excise Duty (SED) lying unutilised in the PLA consequent to the abolition of SED vide Notification No. 5/93-C.E., dated 28-2-1993. The issue had earlier been examined by the Board the context of abolition of SED vide Notification No. 178/86-C.E., dated 1-3-86 and instructions were issued, in consultation with Chief Controller of Accounts, vide Circular No. 23/86-CX.6, dated 27-6- 1986. Board desires that the procedure prescribed therein may be followed, mutatis - mutandis, in case of unutilised credit balance of SED lying in PLA of assessees in your jurisdiction.
+ The Circular 23/86-CX.6 mentions -
3. The assessee desiring to transfer the unutilised credit balance of SED to the head of account of BED in his PLA may make an application in quintuplicate indicating, inter-alia, (i) name and address of the assessee, PLA No. sub-major and minor head of account name of the commodity and tariff item balance of SED and (ii) sub major and minor head of BED account, name of the commodity and tariff item to which the amount is to be transferred. On receipt of the said application, the Range Superintendent after making necessary effect checks and verifications will permit the transfer of the credit balance under SED to the BED after indicating the proper head of account and make endorsement to this effect on all copies of the application. One copy of the application bearing the Range Officer's endorsement permitting the transfer shall be forwarded to the C.A.O. so has to enable him to carry out necessary reconciliation/adjustment in his accounts. Other copies will be handed over to the assessee, who would attach the same to the RT-12 pertaining to the month in which the transfer is effected.
Coupled with the above, the following decisions as reported by TIOL should assist the assessee in getting the due refund -
++ Jay Shree Tea & Industries Ltd.
Refund - Withdrawal of sum deposited in PLA following removal of duty on packaged tea - Neither unjust enrichment nor limitation to apply such deposits as the money belongs to the assessee.
++ Bijalimoni Tea Estate
Un-utilised amount in PLA is refundable to the appellants
++ Welspun India Ltd -
Refund of Unutilized amount in PLA - the money is that of the assessee and can be claimed by him without attracting the provisions of refund claim:
It is also pertinent to note that section 11B(2), first proviso clearly excludes the following from the bar of unjust enrichment -
(b) unspent advance deposits lying in balance in the applicant's account current maintained with the Commissioner of Central Excise;
DDT may like to make a mention of the above in its daily issue for the benefit and guidance of all concerned. Hopefully, the Board also shows some indulgence.