2019 (8) TMI 1652 - AT - Service Tax

Rectification of Mistake - error apparent on the face of record - applicant has couched the contents of the order of the Hon ble High Court of Bombay in an attempt to mislead the Tribunal - HELD THAT - The detriment to the applicant herein, and appellant in proceedings before the Tribunal, was a consequence of non-discharge of tax liability. That it was made good in the course of investigations is not acceptable as restitution for having failed, in the first instance, to deposit tax collected from recipients of service. Any dispute over liability to discharge any indirect tax is acknowledged as the right of an appellant who has, either owing to inability or consciously, not passed on the burden of such tax to the recipient. Having collected the tax, any dispute, while it may not be discountenanced, is questionable when the obligation to deposit that tax with the exchequer has been observed in its breach. The dispute that was carried to Tribunal was certainly not of such commonplace occurrence as to present such congruence. The case law cited by the applicant in the appellate proceedings was, therefore, unlikely to be conforming to the facts and circumstances of the present dispute to warrant acceptance as binding precedent. The demonstrated lack of credibility to justify the claim for liberal interpretation of provisions relating to payment, and of recovery, of tax impinges upon such claim. The Tribunal was not incorrect in disregarding the mitigating aspects sought for by the appellant for relieving themselves of penal consequence by a restitution that is much too late in the day - there is no justification for recall of the order as prayed for by the applicant - application dismissed.

Summary

Issues:
Rectification of mistake under section 35C of Central Excise Act, 1944; Misleading arguments before the Tribunal; Failure to consider vital submissions in the order; Dispute over tax liability; Responsibility of the agent for tax breach; Binding precedent and its applicability; Justification for recall of the order.

Rectification of Mistake under Section 35C:
The judgment pertains to an application by M/s ITL Tours and Travels Pvt Ltd under section 35C of the Central Excise Act, 1944, seeking rectification of a mistake claimed to be apparent from the record in a final order dated 20th October 2015. The order was impugned before the Hon'ble High Court of Bombay but withdrawn to seek rectification by the Tribunal. The applicant sought a recall of the order for fresh decision, alleging that vital submissions were not considered, grounds of appeal were ignored, and certain provisions of the Finance Act, 1994 were overlooked.

Misleading Arguments and Failure to Consider Submissions:
The Tribunal expressed dissatisfaction with the manner in which the applicant presented arguments, attempting to mislead by misrepresenting the High Court's observations. The High Court directed the applicant to file an application for rectification of mistake before the Tribunal. The applicant insisted that specific submissions were not closed with a finding, various grounds were ignored, and certain statutory provisions were not considered. However, the Tribunal found no valid grounds for recall of the order.

Dispute Over Tax Liability and Responsibility of Agent:
The Tribunal highlighted that the applicant's failure to discharge tax liability initially cannot be remedied by subsequent compliance. The applicant's claim that their agent was responsible for the breach was dismissed, emphasizing that a principal cannot absolve itself from the actions of its agent in tax matters. The dispute between principal and agent does not affect the tax relationship with the State.

Binding Precedent and Justification for Recall:
The Tribunal emphasized that not every judgment applies universally, especially in unique cases. The applicant's reliance on case law was deemed irrelevant due to the distinctive nature of the dispute. The Tribunal concluded that the applicant's plea for recall lacked valid grounds for relief and was rejected, citing the breach of statutory obligations and the belated attempt at restitution as inadequate justification.

This detailed analysis of the judgment covers the issues of rectification of mistake, misleading arguments, failure to consider submissions, tax liability dispute, agent's responsibility, binding precedent, and the justification for recall, providing a comprehensive overview of the legal aspects and reasoning behind the Tribunal's decision.