2019 (12) TMI 1675 - AT - Central Excise

Rectification of mistake - time limitation - application rejected on the ground that it is filed beyond six months of passing of the impugned final order - Section 35C(2) of the Central Excise Act - HELD THAT - No doubt the Tribunal vide order in case of NATIONAL ENGG. INDS. LTD. VERSUS COMMISSIONER OF C. EX., JAIPUR 2001 (11) TMI 104 - CEGAT, COURT NO. I, NEW DELHI and the final Order in case of M/S. RSPL LTD. VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE, ALWAR 2019 (4) TMI 2151 - CESTAT NEW DELHI has held that the ROM application can be entertained within six months from the date of the order. However, on the other hand, the learned Advocate has placed reliance on the decisions of Hon‟ble Gujarat High Court in case of LILADHAR T KHUSHLANI VERSUS COMMISSIONER OF CUSTOMS 2017 (2) TMI 200 - GUJARAT HIGH COURT where it is held It is reported that the rectification application was submitted within the period of six months from the date of receipt of the order/dispatch order, and therefore, the impugned order passed by the learned CESTAT cannot be sustained and the same deserves to be quashed and set aside and the matter is required to be remanded to the learned Tribunal to consider the rectification application in accordance with law and on its own merits treating the same to have been filed within the period of limitation provided under the Act. Further, reliance was placed on the decision of VADILAL INDUSTRIES LTD. VERSUS UNION OF INDIA 2005 (12) TMI 103 - HIGH COURT OF GUJARAT AT AHMEDABAD , wherein it is held that relevant date of six months for filing of ROM has to be reckoned from the date of receipt of the order by the appellant. Thus, it is found that any person will notice error apparent in the order only when he receives the order and examine it. This aspect is based on the various decisions of the High Courts referred above - it is thus concluded that the relevant date for computation of six months, as envisaged in the provision of Section 35C(2) of the Central Excise Act, will be from date of receipt of the order by the appellant. The Section 129 (B) (2) of the Customs Act, 1962 is parimateria to Section 35C(2) of Central Excise Act, 1944 and hence the decision of SUNITADEVI SINGHANIA HOSPITAL TRUST VERSUS UNION OF INDIA 2008 (11) TMI 249 - SUPREME COURT will be applicable to Central Excise Act, as well. Thus, it is found that all the submissions made by the appellant were not considered by the Tribunal except it got swayed by the admission on part of Shri Alok Aggaral, proprietor of the appellant accepting the clandestine removal. It is apparent from the record that the provision of Section 9D of the Central Excise Act, 1944 as mentioned to have been submitted by appellant, have not been considered while adjudicating the case rather reliance on the third party evidences for alleged clandestine removal of manufactured goods by the appellant - thus, vital aspect which are very much essential to be considered by the Tribunal could not have been considered in the said final order. Thus, the errors as pointed out in the impugned order are errors apparent on record. Accordingly, ROM is allowed.

Summary

Issues Involved:
1. Failure to consider material evidence.
2. Allegation of clandestine removal based on transactions with M/s Hind Metal Industries.
3. Admission of statement by Shri Alok Aggarwal.
4. Reliance on retracted statements.
5. Jurisdiction of the Tribunal to rectify mistakes apparent on the record.
6. Calculation of the limitation period for filing ROM.

Detailed Analysis:

1. Failure to Consider Material Evidence:
The appellant argued that the Tribunal, in its Final Order dated 20.06.2018, failed to consider the material evidence on record and upheld the order-in-original dated 19.10.2015 in a routine manner. The appellant contended that this oversight constituted a significant error that warranted rectification.

2. Allegation of Clandestine Removal Based on Transactions with M/s Hind Metal Industries:
The appellant's appeal was rejected on the sole ground of admitting transactions with M/s Hind Metal Industries, which led to the booking of a case of clandestine removal against the appellant. The appellant highlighted that the Tribunal had allowed the appeal of M/s Hind Metal Industries (Final Order No. 51339/2018 dated 12.04.2018), setting aside the duty demand and penalty due to the failure to satisfactorily establish clandestine manufacture and clearance.

3. Admission of Statement by Shri Alok Aggarwal:
The appellant contended that the Tribunal failed to consider their arguments regarding the admission of the statement by Shri Alok Aggarwal. The appellant cited several precedents, including Jindal Drugs Pvt. Ltd. Vs. Union of India and CCE, Delhi-I Vs. Kuber Tobacco India Ltd., arguing that the Tribunal did not appreciate the settled law regarding the admissibility of such statements.

4. Reliance on Retracted Statements:
The appellant argued that the Tribunal erred by relying solely on the statement of Shri Alok Aggarwal, which had been retracted at the earliest possible opportunity before the Secretary to the Government of India, New Delhi. The appellant emphasized that the Tribunal was duty-bound to consider various precedent judgments on the subject matter of clandestine removal, which were raised during the appeal and personal hearing.

5. Jurisdiction of the Tribunal to Rectify Mistakes Apparent on the Record:
The appellant relied on several judicial decisions, including CCE, Mumbai-III Vs. NTB International Pvt. Ltd. and CST Bangalore Vs. Yokogawa Blue Star Ltd., to argue that the Tribunal has the jurisdiction to rectify mistakes apparent on the record under Section 35C(2) of the Central Excise Act. The appellant cited the decision of the Hon’ble High Court of Madras in Roots Multiclean Ltd. Vs. CESTAT, Chennai, which held that the Tribunal could rectify mistakes within six months from the passing of the order.

6. Calculation of the Limitation Period for Filing ROM:
The appellant argued that the ROM was filed within six months from the receipt of the Tribunal’s order, as per the decisions of the Hon’ble Gujarat High Court in Liladhar T. Khustani and Allied Fibres Ltd. The Tribunal considered these arguments and concluded that the relevant date for computing the six-month limitation period is from the date of receipt of the order by the appellant. The Tribunal overruled the preliminary objection raised by the Departmental Representative regarding the maintainability of the ROM application on the aspect of limitation.

Conclusion:
The Tribunal concluded that the errors pointed out in the impugned order were apparent on the record. The Tribunal allowed the ROM and directed that the appeal be heard afresh, considering all the material evidence and arguments presented by the appellant. The Registry was instructed to take the necessary steps to facilitate the rehearing of the appeal.