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2014 (3) TMI 130 - HC - Central ExcisePower of tribunal to rectify the mistake - In the process of rectifying its mistake it considered the issue of limitation for the first time which was not considered earlier. - Held that - the issue of limitation though argued before the Tribunal, was not considered while passing the order dated 1 September 2004. The decision relied upon by Mr.Bhate in the matter of Deva Metal Powders Pvt. Ltd. (2007 (12) TMI 221 - SUPREME COURT OF INDIA) in fact very categorically holds that a mistake capable of being rectified is not confined to clerical or arithmetical mistake but any error apparent from the record. A mistake which can be rectified is one which is patent, obvious and whose discovery is not dependent on argument or elaboration. In this case, the Tribunal rectified its mistake in not having considered the issue of limitation earlier. In the process of rectifying its mistake it considered the issue of limitation for the first time which was not considered earlier. This consideration by the Tribunal was well within the exercise of its jurisdiction under Section 35C(2)of the Act to rectify a mistake apparent on the record. Gujarat High Court in Baroda Rayon Corporation Ltd. Vs. Union of India 2005 (10) TMI 104 - HIGH COURT OF GUJARAT AT AHMEDABAD observed that where the findings of a Tribunal are a result of ignoring the facts on record or failing to consider the averments made in the memorandum of appeal, then such an error is an error apparent on record. In such cases, the Court held that the Tribunal should not feel shy to accept that it had committed an error. Tribunal was correct in exercising its jurisdiction under Section 35C(2) of the Act and correct its mistake by considering the issue of limitation. - Decided against the revenue.
Issues Involved:
1. Justification of the Tribunal in passing an order under Section 35C(2) of the Central Excise Act, 1944 after six months from the order under Section 35C(1). 2. Whether the Tribunal's order amounted to a review rather than a rectification. 3. Justification of the Tribunal in recalling its entire order and reducing the duty demand. Detailed Analysis: Issue 1: Justification of the Tribunal in passing an order under Section 35C(2) of the Central Excise Act, 1944 after six months from the order under Section 35C(1) The Respondent-Assessee filed an application for rectification on 27 December 2004, seeking to amend the order dated 1 September 2004. The application was filed within the six-month period stipulated under Section 35C(2) of the Act. Section 35C(2) allows the Tribunal to rectify any mistake apparent from the record within six months from the date of the order. The Apex Court in Sree Ayyanar Spinning and Weaving Mills Ltd. v/s. C.E.T. held that the time limit for rectification applies only to the Tribunal's suo moto actions, not to applications filed within the stipulated period. Thus, the Tribunal's action was justified, and the question is answered in the affirmative, against the revenue and in favor of the respondent-assessee. Issue 2: Whether the Tribunal's order amounted to a review rather than a rectification The Revenue argued that the Tribunal's order dated 20 December 2005 amounted to a review, which is beyond its jurisdiction, as the Tribunal is only empowered to rectify clerical or typographical errors. The Respondent-Assessee contended that the Tribunal's order was a rectification of an error apparent on the record, as the issue of limitation was argued but not considered in the original order. The Tribunal's jurisdiction under Section 35C(2) is to rectify mistakes apparent from the record, which includes errors that are obvious and self-evident. The Tribunal's failure to consider the issue of limitation, which was argued before it, constituted a mistake apparent from the record. The Tribunal's action to rectify this mistake was within its jurisdiction under Section 35C(2). Thus, the Tribunal's order did not amount to a review but a rectification, and the question is answered in the affirmative, in favor of the respondent-assessee. Issue 3: Justification of the Tribunal in recalling its entire order and reducing the duty demand The Respondent-Assessee pointed out that the issue of limitation was not considered in the original order dated 1 September 2004, despite being argued. The Tribunal's failure to address this issue constituted a mistake apparent from the record. The Apex Court in Honda Siel Power Products Ltd. and Bharat Bijlee Limited held that the Tribunal is duty-bound to rectify mistakes to ensure no party suffers due to its errors. The Tribunal's rectification of its mistake by considering the issue of limitation and reducing the duty demand was justified. The reduction was based on the fact that the classification lists were approved earlier and there was no finding of suppression to invoke the extended period of limitation. The Tribunal's action was a rectification, not a review. Thus, the Tribunal was justified in recalling its order and reducing the duty demand, and the question is answered in the affirmative, in favor of the respondent-assessee. Conclusion: The appeal is dismissed with no order as to costs, affirming that the Tribunal's actions were justified under Section 35C(2) of the Central Excise Act, 1944.
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