2002 (8) TMI 491 - AT - Central Excise

Summary

Issues:
Rectification of mistakes under Section 35(2) of the Central Excise Act regarding the imposition of personal penalty on directors of a Private Company without specific allegations or findings against them.

Analysis:
The case involved eight applications seeking rectification of mistakes under Section 35(2) of the Central Excise Act related to an order dated 29-4-97. The main issue raised was whether personal penalties could be imposed on directors of a Private Company without specific allegations or findings against them. The counsel for the applicants argued that the Tribunal erred in holding the directors liable for penalties, especially since there were no specific allegations or findings against them in the show-cause notice or adjudication orders. The counsel highlighted that the provision for proceedings against directors was introduced in the Central Excise Act in 1985, while the alleged acts occurred in 1982-83, questioning the legality of imposing penalties retroactively.

The counsel contended that without specific findings regarding the directors' personal involvement, there was no justification for imposing penalties. He referenced previous decisions to support his argument and emphasized that the penalty provision for directors came into effect after the alleged offenses. On the other hand, the learned DR opposed the applications, stating that the Tribunal's decision was based on corroborative evidence and not on apparent mistakes. The DR argued that the reduction in penalties was justified based on the gravity of the offense and that the Tribunal's conclusion did not warrant rectification.

Upon careful consideration, the Tribunal found no apparent mistakes in the order that required rectification. It emphasized that the power to rectify mistakes under Section 35(C) of the Central Excise and Salt Act was limited in scope and did not extend to reviewing earlier orders. The Tribunal clarified that errors of judgment or debatable legal points did not constitute apparent mistakes. Citing legal precedents, the Tribunal highlighted that an error to be apparent must be clear and unambiguous, not requiring a lengthy process of reasoning. The Tribunal rejected the applications, stating that the requests for rectification were essentially attempts to review the order, a power not vested in the Tribunal.

In conclusion, the Tribunal rejected all eight applications for rectification, maintaining that no apparent mistakes existed in the order regarding the imposition of penalties on directors of a Private Company. The decision underscored the limited scope of rectification powers and the distinction between errors of judgment and clear, unambiguous mistakes that warrant rectification.