2004 (4) TMI 436 - AT - Central Excise

Summary

Issues involved:
Rectification of mistake in Final Order regarding imposition of penalty under Section 11AC.

Analysis:
1. The application for rectification of mistake alleged that the Final Order passed by the Tribunal contained an error in relation to the imposition of penalty under Section 11AC. The applicant argued that the penalty was not warranted as the duty had been paid before the issuance of the show cause notice. The Third Member agreed that no mandatory penalty was justified due to the circumstances surrounding the case, including the submission of a revised Classification List and the provisional nature of the assessment until finalization. The applicant sought the removal of penalties totaling Rs. 28,30,774/- under Section 11AC and Rs. 1.50 lakhs under Rule 173Q, along with the interest on duty.

2. In the Final Order, the Tribunal had upheld the duty demand of Rs. 71,87,376/- under Section 11A of the Central Excise Act and imposed penalties as mentioned earlier. The applicants contended that although the mis-declaration and suppression of facts were disapproved, the penalty under Section 11AC was still imposed. They argued that since the duty was paid during the investigation stage, no penalty under Section 11AC should have been levied. The interest on duty and the penalty under Rule 173Q were also challenged by the applicants.

3. During the hearing, the Counsel for the applicants focused on the Section 11AC penalty, emphasizing that no plea against the penalty had been raised in response to the show cause notice or in the appeal memorandum filed with the Tribunal. On the other hand, the SDR argued that the submissions regarding the Classification List filed in 1996 were already considered in the final order. The SDR cited relevant legal precedents to support the position that the plea for rectification was not valid as it was not part of the record when the final order was issued.

4. The Tribunal examined the arguments presented by both sides and concluded that the challenge against the penalty under Section 11AC was not substantiated. It was noted that the plea regarding the non-imposability of penalty due to the pre-payment of duty was not raised during the appeal process or in response to the show cause notice. The Tribunal distinguished this case from previous judgments where rectification was allowed due to specific pleas not being considered in the final order. It was emphasized that a mistake apparent from the record should be evident without extensive reasoning. Relying on legal principles and precedents, the Tribunal held that the Final Order was free from the alleged mistake, and the application for rectification was rejected.