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TMI Blog2017 (3) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... orts Ltd. {Tractor Engineering Division (TED)} had supplied spare parts to M/s Escorts Ltd (TD) now known as Escorts Ltd-AMG (Tractor Plant)- (Appellants) for captive consumption during the period March, 1995 to November, 1995 by adopting the selling price of the said spare parts on cost construction basis in terms of Rule 6(b)(ii) of the Central Excise Valuation Rules,1975. During the material time, M/s Escorts Ltd (TED) were also selling the said spare parts in the open market through their Spare Parts Division at much higher prices. Accordingly a show cause notice was issued to M/s Escorts Ltd (TED) proposing demand of duty on the parts cleared to M/s Escorts Ltd (TD) (now AMG-Tractor plant) i.e. Appellants, by adopting the selling price of the Spare Parts Division of M/s Escorts Ltd. (TED), which culminated into confirmation of demand of Rs. 3,84,01,009/- against M/s Escorts Ltd (TED) alongwith an equal amount of penalty, vide Order-in-Original dated 29.10.97. Against the said Order-in-Original, M/s Escorts Ltd (TED) filed an appeal before the ld. Commissioner of Central Excise (Appeals) and the Commissioner (Appeals) vide his Order-in-Appeal No.459-CE/DLH/98 dated 23.09.98 rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not referred to any rule or notification prevailing on the date of payment of differential duty, which may entitle them to refund of the additional duty paid. 4. Ld. Advocate for the appellant submits that the refund claim filed by the appellant is not re-opening of the order of the Settlement Commission and is not violative of Section 32M of Central Excise Act, 1944. He also submits that the present refund claim has been filed by the appellant which is a different unit of the appellant and as recipient of the goods, it is entitled to take Cenvat Credit of the duty paid by the Escords (TED). He further submits that the refund is admissible to the appellant under Rule 57E of the Central Excise Rules. He contended that a plain reading of Rule 57E shows that if for any reason, adjustment of duty credit is not possible, the recipient availing credit, is entitled to a refund of the duty paid subsequently by the manufacturer of the goods. In the present case, the appellant was not able to adjust the credit of duty paid by Escorts (TED) as the tractors had been exempted from payment of excise duty vide Notification No.23/2004-CE. He relied on the decision of the Hon'ble Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments of the admitted duty liability shall be appropriated and adjusted towards the duty liability and there is no further duty liability remaining at the end of the applicant. (b) The Bench also grant the full immunity from interest, penalty, and prosecution under the relevant provisions of the Act as far this case is concerned" The order of Settlement Commission as per Section 32F(9) provides for the terms of settlement to make the settlement effective. It is clear from the above terms and conditions that M/s Escorts (TED) were not authorised by the Settlement Commission to pass on the cenvat credit of the amount of Rs. 3,84,01,009/- which had been appropriated and hence there was no question of refund of that amount which had been part of settlement under Section 32F(9) of Central Excise Act, 1944. 7.3 We also note that during the material time, both M/s Escorts (TED) and Escorts Ltd. (TD), later known as AMG (Tractor Plant), were having common central excise registration and therefore seeking of the refund by Escorts Ltd.-AMG (Tractor Plant) paid by M/s Escorts (TED) would not only nullify the terms of the settlement, it would also be tantamount to re-opening and vitiating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case pertains to the period from March 1995 to November 1995 as they had procured the inputs during that period. They argued that Section 38A protects their rights and privileges which have accrued to the appellants. The appellants relied upon the case law of Tamil Nadu Petro Products Ltd.(supra). They are apparently referring to Section 38A(c) of the Act on the basis that they had received the inputs in the year 1995 and had manufactured their final products. 10. We find that in the present case the spare parts were supplied to M/s Escorts Ltd- AMG (Tractor Plant) in 1995, the cause of action for payment of differential duty as per Settlement Commission took place in 2004 when the duty was paid in three equal installments between October, 2004 and December, 2004. Rule 57E of the Central Excise Rules, which is the basis of refund claim, was abolished w.e.f. 01.04.2000. Even if the party's claim of accrual of rights under Section 38A is admitted for a moment, it would only protect the claim of duty paid on date of abolition of the said rule. The accrual of any rights and privileges to the appellants would be limited to the extent available on the date of repeal of Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court had held that penal provisions could not be applied retrospectively to punish a person for offending transactions committed in the past. It was also held vide National Engineering Industries case (supra) that law had to be applied as it existed when it was invoked. In the instant case, when MRL paid the differential duty following adjudication, Rule 57E(3) barred availment of the differential credit by the buyer of inputs, namely TPL. In view of the binding ratio of the Apex Court's judgments discussed (supra), we find that the appellants earned the right to receive the credit of additional duty only in the year 1999 when Rule 57E(3) was already in force. In the circumstances, we sustain the impugned order and dismiss the appeal filed by M/s. TPL." In these facts, the Tribunal held that amendment vide Rule 57(E)(3) would apply. Hence, the said decision does not help the appellants in the facts of the present case. In fact, the decision goes against the appellants. Applying the ratio of the above judgment to the instant case, cenvat credit of differential duty could not accrue before 2004 when differential duty was paid. By that time, Rule 57E ibid had already been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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