2015 (3) TMI 947 - AT - Customs

Rectification of mistake - Sludge mistakenly charged to duty - Whether an error committed by the Adjudicating Authority in his order dated 25.05.2007 could have been rectified as per the provisions of Section 154 of the Customs Act, 1962 - Held that - charging of duty on sludge in order dated 25.05.2007, which was not otherwise payable as per the prevailing practice, is definitely a case of rectification within the language of provisions contained in Section 154 of the Customs Act 1962. Lower authorities were not justified in saying that such a mistake/ error on the part of adjudicating authority cannot be rectified as per the provision of Section 154 of the Customs Act, 1962. Accordingly, appeal filed by the appellant is required to be allowed for carrying out suitable rectification in the order dated 25.05.2007. - Decided in favour of assessee.

Summary

Issues:
Rectification of error under Section 154 of the Customs Act, 1962.

Analysis:
The appellant filed an appeal against the rejection of their appeal as not maintainable under OIA NO. PJ/628/ VDR-II/2012-2013. The appellant argued that the sludge in on shore tanks was not charged to duty based on test reports. They requested rectification of an error in the assessment, which was mistakenly charged to duty. The appellant cited several reminders and legal precedents to support their argument that errors by the Adjudicating Authority can be rectified under Section 154 of the Customs Act, 1962. The Revenue contended that the appellant should have appealed against the finalization of provisional assessment orders.

The main issue revolved around whether the error in the Adjudicating Authority's order could be rectified under Section 154 of the Customs Act, 1962. The section allows for correction of clerical or arithmetical mistakes or errors arising from accidental slip or omission. The appellant promptly requested rectification upon noticing the error, followed by repeated reminders. The Revenue's delayed response after four years indicated an inconsistency. Judicial pronouncements, including the Bennet Coleman & Co. Ltd case, supported the interpretation that errors like non-consideration of an exemption notification could be rectified under Section 154. The charging of duty on sludge, contrary to prevailing practice, constituted a case for rectification under the Customs Act.

The Tribunal found that the error in charging duty on the sludge, which was not payable as per prevailing practice, warranted rectification under Section 154 of the Customs Act, 1962. The lower authorities' refusal to rectify the mistake was deemed unjustified. Consequently, the appellant's appeal was allowed, granting them suitable rectification in the order dated 25.05.2007. The decision was pronounced in court, allowing the appeal with any consequential relief.