2015 (5) TMI 1025 - AT - Central Excise

Rectification of error apparent from record filed under Section 35C(2) - Held that - Provisions of Rule 34(a) of SWM(PC) Rules have not been considered and the letter dated 13-5-2004 and 28-2-2004 of the legal metrology department addressed to the appellant wherein the appellant had been informed that the tiles supplied by them to building contractors, builders, Hotels, Hospitals Housing Societies etc. are not exempt from the provisions of SWM(PC) Rules had not been considered by the Tribunal, we find that this plea is not factually correct as while the plea regarding the provisions of Rule 34(a), has been specifically considered in para 17 of the Tribunals final order, the other plea regarding letter dated 13-5-2004 of the legal metrology department Jhajjar has been considered in para 16 of the Tribunal s order. Once a plea made by the appellant in the grounds of appeal and at the time of personal hearing has been considered by the Tribunal and not accepted, whether rightly or wrongly, this cannot be treated as a mistake apparent from record needing rectification under Section 35C(2). Mistake apparent from record would occur only when a specific plea has been made and has not been considered at all. Under the provisions of Section 35C(2) the Tribunal cannot go into the question of the correctness or otherwise, of the Tribunal s decision on a particular plea made by the Appellant. In the ROM proceedings the Tribunal can consider only these points which as per the records of the case, had been raised and the Tribunal had omitted to consider these points and give its findings on them. The third mistake apparent from record pointed out by the appellant is that in the written submissions they had specifically pointed out to the judgement of Bombay Bench of the Tribunal in the case of H & R Johnson (India) Ltd. v. CCE, Raigad (2014 (6) TMI 453 - CESTAT MUMBAI ) wherein an identical issue was involved and the Tribunal in that case had held that in respect of supplies of tiles to builders, real estate developers etc. where the tiles had been supplied in retail packs with MRP declared on them and there was no declaration on the packages that the goods are meant for industrial buyers and are not meant for retail sails, the provisions of SWM(PC) Rules would be applicable and the assessable value of such goods would be required to be determined under the provisions of Section 4A. This judgment of the Tribunal had been affirmed by the Apex Court 2015 (10) TMI 559 - SUPREME COURT . ROM allowed.

Summary

Issues Involved:
1. Applicability of Rule 34(a) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (SWM(PC) Rules).
2. Consideration of clarifications from the Legal Metrology Department.
3. Non-consideration of the Tribunal's judgment in the case of H & R Johnson (India) Ltd. v. CCE, Raigad.

Detailed Analysis:

1. Applicability of Rule 34(a) of the SWM(PC) Rules:
The appellant argued that under Rule 34(a) of the SWM(PC) Rules, packages specifically marked for exclusive industrial use are exempt from the requirement to declare MRP. They contended that since their tiles were not marked for exclusive industrial use, the MRP had to be declared, and duty paid on the value determined under Section 4A of the Central Excise Act, 1944. The Tribunal had previously dismissed this plea, but the appellant claimed it was not considered in the final order. Upon review, it was found that this plea was indeed considered in paragraph 17 of the Tribunal's final order. The Tribunal reiterated that once a plea is considered, its correctness cannot be questioned under Section 35C(2) as a mistake apparent from record.

2. Consideration of Clarifications from the Legal Metrology Department:
The appellant highlighted clarifications from the Legal Metrology Department, which stated that if packages are not marked for industrial use, the provisions of the SWM(PC) Rules apply, necessitating the declaration of MRP. The appellant argued that these clarifications were not considered by the Tribunal. However, it was found that these clarifications, particularly the letter dated 13-5-2004, were considered in paragraph 16 of the Tribunal's final order. The Tribunal concluded that the Commissioner rightly determined there was no requirement for declaring MRP for tiles supplied to builders, contractors, and industrial buyers. The Tribunal held that non-acceptance of the appellant's plea does not constitute a mistake apparent from record.

3. Non-consideration of the Tribunal's Judgment in the Case of H & R Johnson (India) Ltd. v. CCE, Raigad:
The appellant argued that the Tribunal failed to consider its judgment in the H & R Johnson (India) Ltd. case, which had been affirmed by the Supreme Court. This judgment held that if tiles are supplied in retail packs without marking them for industrial use, the provisions of the SWM(PC) Rules apply, and duty must be paid on the value determined under Section 4A. The Tribunal acknowledged that non-consideration of a binding precedent constitutes a mistake apparent from record. The Tribunal's judgment in the H & R Johnson case, affirmed by the Supreme Court, became a binding precedent. Consequently, the Tribunal found that its previous order suffered from a mistake apparent from record due to non-consideration of this binding precedent.

Conclusion:
The Tribunal recalled its final order No. E/53154/2014 dated 8-8-2014 and allowed the ROM application. The case was directed to be listed for final hearing on the limited question of the applicability of the Tribunal's judgment in the H & R Johnson (India) Ltd. case. The Tribunal emphasized that its power to rectify mistakes apparent from record includes considering binding precedents not previously considered, even if such precedents were established after the original order.