2011 (12) TMI 429 - AT - Central Excise

Rectification of mistake - Held that - Sub-rule (3) of Rule 57-I was a part of the record and the same ought to have been considered by the Bench whether or not it was cited before it. This view, it appears, can claim support from the Hon ble Supreme Court s judgment in the case of Saurashtra Kutch Stock Exchange Ltd. (2008 (9) TMI 11 - SUPREME COURT). The Apex Court held that non-consideration of a decision of the jurisdictional High Court or of the Supreme Court could be said to be a mistake apparent from the record, to be rectifiable under Section 254(2) of the Income Tax Act. In my view, non-consideration of a statutory provision would ipso jure constitute apparent mistake. The mistake in the instant case is of this kind and the same needs to be rectified - Decided in favour of assessee.

Summary

Issues involved: Application for amendment of Final Order due to apparent mistake in not considering the provision for levy of interest on inadmissible credit under Rule 57-I of the Central Excise Rules, 1944.

Analysis:
1. Issue of Levy of Interest on Inadmissible Credit: The Department filed an application pointing out a mistake in Final Order No. 857/2010, which set aside a demand of interest on duty due to the absence of a provision for interest on inadmissible credit at the time of the earlier show-cause notice. The dispute arose from a second show-cause notice issued for recovery of interest on MODVAT credit from 5-1-1996 to 24-6-2004. The Department argued that sub-rule (3) of Rule 57-I, invoked in the notice, was overlooked, leading to erroneous conclusions favoring the assessee. The Tribunal found merit in the Department's grievance, noting that the provision for interest at the rate prescribed under Section 11AA of the Act was overlooked in the Final Order.

2. Consideration of Statutory Provision: The Tribunal acknowledged that sub-rule (3) of Rule 57-I, which mandates interest payment for non-payment within three months of a demand notice, was correctly applied in the initial proceedings. The Tribunal erred in not considering this provision while setting aside the demand for interest on inadmissible credit. The Tribunal referred to a Supreme Court judgment emphasizing that non-consideration of a statutory provision constitutes a mistake apparent from the record. Consequently, the Tribunal concluded that the failure to consider the statutory provision amounted to an apparent mistake that needed rectification.

3. Recall of Final Order: In light of the above analysis, the Tribunal allowed the Department's application for amendment and recalled the Final Order. The appeal was directed to be listed for a hearing to rectify the mistake in not considering the provision for levy of interest on inadmissible credit. The Tribunal's decision to recall the Final Order was based on the acknowledgment of the oversight regarding the statutory provision and the necessity to rectify the error to ensure legal correctness in the judgment.

In conclusion, the Tribunal recognized the oversight in not considering the provision for levy of interest on inadmissible credit under Rule 57-I, leading to an erroneous decision in favor of the assessee. The Tribunal rectified this mistake by allowing the Department's application for amendment and recalling the Final Order for further proceedings.