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TMI Blog2007 (10) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the same factory. 2. The appellants, at the relevant point of time, were manufacturing cotton yarn, blended yarn and fabrics, which were consumed by them within the factory of production for weaving of fabrics. Prior to December, 1980 they were paying duty on the yarn captively consumed. In October, 1980 by judgment in the case of J.K. Cotton Spinning Weaving Mills Company Ltd. v. Union of India, reported in 1981 (8) E.L.T. 887 the Hon'ble Delhi High Court held that removal of yarn which was consumed within the factory of production did not amount to removal within the meaning of Rules 9 and 49 of the erstwhile Central Excise Rules, 1944 and hence set aside the duty demand made on such captively consumed yarn. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 17th January, 1995 [1996 (83) E.L.T. 259 (S.C.)] directing that if notices under Section 11A had not been served the revenue would be entitled to do so within the tithe limit prescribed under Section 11A. Pursuant to the Apex Court Judgment, the Asst. Commissioner of Central Excise issued a show cause notice dated 7th April, 1995 proposing recovery of duty of Rs. 2,96,14,265.05 which was adjudicated by Order dated 27-3-1996 confirming the demand raised in the notice. The bank guarantee furnished by the appellants, in terms of Apex Court's Interim Order were encashed by the Department on 13-3-1996. The appellants challenged the Order of the Asst. Commissioner before the Commissioner (Appeals) and vide Order dated 13th June 1996 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and limitation. The Revenue in exercise of the powers conferred under Section 35E(2) of the Central Excise Act, went in appeal before the Commissioner (Appeals) seeking setting aside of the Order of the Dy. Commissioner who had sanctioned the amount. Before disposal of the appeal of the Revenue by the Commissioner (Appeals), the Revenue challenged the Tribunal's Order dated 15-5-2000 before the Hon'ble Bombay High Court which by Order dated 17-2-2005 dismissed the Revenue's application No. 2 of 2001 on the basis of contention made by the ld. Counsel of the Revenue that the issue involved in this matter is squarely covered by the judgment of the Hon'ble Supreme Court in the case of Metal Forgings v. Union of India reported in 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed in the case of Best Crompton Engg. Ltd. v. CCE, Chennai - 2000 (121) E.L.T. 272 (Tri.- LB). The Tribunal's decision in Re-Rolling Mills was followed in the case of Richardson Crudaas 1972 - 2000 (123) E.L.T. 918 (Tri.) and Panyam Cements Mineral Indus. Ltd v. CCE - 2004 (178) E.L.T. 434 (T). We also note that the Hon'ble Mumbai High Court in the case of Bajaj Auto Ltd. v. Union of India - 2003 (151) E.L.T. 23 (Bom.). has followed inter alia the decision of the Apex Court in the case of Re-Rolling Mills (cited supra). The CBEC also issued, Circular No. 423/56/98- CX., dated 22-9-1998 clarifying that the Order passed under Section 35E(2) does not automatically result in the recovery of the refund and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued by the department in the subsequent appeal under Section 35(E). Therefore, limitation under Section 11A would not have restricted the proceedings under Section 35(E). We find that the Tribunal has observed: "The duty was paid under protest and such payment of differential duty cannot by any stretch of imagination be termed as adjustment of duty after the final assessment thereof because the payment of duty under protest keeps the assessment alive and the protest continues till the dispute is finally settled and every thing is in the fluid state. Section 11 A has not come into play as the cause of action (relevant date) has not accrued or arisen so far. In the result, on the facts and circumstances of the case, the limitation prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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