2015 (10) TMI 2193 - SC - Customs

Rectification of orders passed by CESTAT dated 22.11.2005 Penalty imposed of 2, 57, 90, 900/- - Held That - Impugned order does not amount to rectification of earlier order but an altogether different view is taken - Impugned order dated 05.09.2006 is set aside and earlier order dated 22.11.2005 is restored Rectification limited to redemption fine.

Summary

Issues:
1. Interpretation of a judgment regarding penalty imposition.
2. Rectification application filed by the respondent.
3. Review/recall of an earlier order by the CESTAT.

Issue 1: Interpretation of a judgment regarding penalty imposition

The Supreme Court dealt with the interpretation of its previous judgment in 'Commissioner of Customs, Mumbai v. J B.V. Jewels' where it was held that the respondent was liable to pay a penalty. The matter was remitted back to the CESTAT for further consideration. The Court highlighted the importance of specific pleas in the grounds of appeal and the applicability of the proviso to subsection (2) of Section 28, emphasizing non-levy and short-levy due to misrepresentation of facts by the respondents. The Court found that the CESTAT did not address the issue of limitation raised by the departmental authorities, leading to the decision that the penalty is to be imposed on the respondent.

Issue 2: Rectification application filed by the respondent

The appeal before the Supreme Court arose from orders passed by the CESTAT in response to a rectification application filed by the respondent seeking rectification of earlier orders. The CESTAT had decided the matter holding that a penalty of a specific amount was to be imposed based on the Supreme Court's judgment. However, the Supreme Court found that the impugned order did not rectify the earlier order but rather substituted it with a different view, amounting to a review/recall of the original decision. The Court held that such a substitution could not be done through a rectification application and set aside the impugned order, restoring the earlier order with clarification that rectification would be limited only to the redemption fine.

Issue 3: Review/recall of an earlier order by the CESTAT

The Supreme Court specifically addressed the nature of the order passed by the CESTAT, noting that it did not align with the purpose of rectification but instead amounted to a review/recall of the earlier decision. The Court emphasized that a rectification application should focus on correcting specific errors or limited aspects of the original order, rather than completely altering the substance of the decision. Consequently, the Supreme Court allowed the appeal, setting aside the impugned order and reinstating the original order dated 22.11.2005, with a specific directive regarding the scope of rectification related to the redemption fine.

This detailed analysis of the Supreme Court judgment provides a comprehensive overview of the issues involved, the Court's reasoning, and the final decision rendered in response to the interpretation of the judgment, rectification application, and review/recall of the earlier order by the CESTAT.