The unspent amount in the current account (PLA) represents duty of excise for the purpose of Section 11B and Section 11BB of the Central Excise Act 1944.

JUDGMENT :

Sanjeev Kumar, J.

1. Though a short but an interesting question of seminal importance arises in this writ petition for determination:-

“Whether an unspent amount lying in the current account (PLA) of an assessee is merely an advance amount for payment of excise duty or is actually or shall be deemed to be ‘Excise Duty’ for the purpose of claim of refund and interest under Section 11B and 11BB of the Central Excise Act 1944 [ ‘the Act’].”

2. Before we embark upon the discussion, we deem it appropriate to notice few facts as are germane to the decision of the question and disposal of the writ petition.

Factual matrix:

3. The petitioner is a registered concern under the Act vide Registration No. AGLPS0219axm001. The petitioner is engaged in manufacture of coffee and tea premixes and was paying the central excise duty. However, the petitioner was availing exemption by way of refund of excise duty in terms of Notification No. 56/2002-CE dated 14.11.2002 as amended.

4. The said exemption notification had laid down a mechanism for availing the benefit of exemption by providing that the manufacturer shall first deposit the excise duty from available CENVAT Credit and in case there remains some balance to be paid, the same shall be paid by debit from Current Account (PLA). After payment of duty as aforesaid, the manufacturer/assessee shall file refund claim and the same would be paid to it through cheque.

5. Indisputably, the excise duty on the subject goods manufactured by the petitioner came to be withdrawn with effect from 01-03-2008 and on this date, an amount of Rs. 75,01,664/- was lying in Current Account (PLA) of the assessee-petitioner.

6. Since no amount was anymore required to be kept in the Current Account due to withdrawal of excise duty of the goods manufactured by the petitioner, as such the petitioner on 04.04.2008 had filed an application for refund of unspent amount lying in Current Account.

7. As is the stand of the revenue, the payment of unspent amount in PLA was subject to determination of previous self credit refund claims of the petitioner which were running in dispute. It was only on 06-05-2010, the jurisdictional Commissioner determined the disputed self credit refund claims and as a result refund of unspent amount in PLA was sanctioned in favour of the petitioner vide order dated 27-07-2010.

8. Since, admittedly, the refund was sanctioned beyond period of three months from the date of application, as such, the petitioner lodged a claim for payment of interest envisaged under Section 11BB of the Act.

9. The Assistant Commissioner Central Excise Division Jammu i.e. Respondent No. 2, rejected the claim on the ground that the refund contemplated under Notification No. 56/2002-CE is not on account of excess payment of duty by the manufacturer but designed only to give effect to exemption. Relying on a decision of CESTAT Mumbai in the case of M/S Navdeep Packaging Industries vs. Commissioner of Central Excise, Ahmadabad-II, 2007 (210) E.L.T.417 (Tri. Mumbai), it was held by the respondent No.2 that unspent amount lying in Account Current (PLA) is not ‘duty’ and refund thereof is covered by Rule 9(1A) and 173G (1A) of the Central Excise Rules, 1944 [‘the Rules’], and that the provisions of Section 11B and Section 11BB are not applicable.

10. Feeling dissatisfied and aggrieved, the petitioner directly approached this Court invoking its extraordinary writ jurisdiction vested by Article 226 of the Constitution of India.

11. The respondents have taken the plea of an alternative remedy under the Act. We, however, are inclined to reject the plea of an exhaustion of alternate remedy for the reason that there are already judgments of various Tribunals in support of the view taken by respondent No.2 and the appeal, if any, filed by the petitioner is not likely to entail a different view on the subject. Having regard to the question raised and availability of view of the CESTAT, we have decided to entertain this petition, the av