2008 (8) TMI 109 - AT - Central Excise

Application for rectification of mistake - mistake apparent from the record - non-consideration of the Apex Court s judgment in Vikram Cement s case - when a decision rendered by the Apex Court is not considered by the Tribunal at the time of final disposal of an appeal, the same would constitute an error apparent on the face of the record by reason of applicability of the doctrine of per incuriam - Therefore, the final order is recalled. The application stands allowed

Summary

Issues:
1. Eligibility for MODVAT credit on lubricants used for lubricating machinery employed in mining.
2. Consideration of Apex Court's judgment in Vikram Cement cases.
3. Applicability of doctrine of per incuriam in non-consideration of relevant judgments.
4. Limitation issue regarding availing MODVAT credit on inputs.

Eligibility for MODVAT Credit on Lubricants:
The appeal raised the issue of eligibility for MODVAT credit on lubricants used for lubricating machinery in mining operations at an off-factory site. The appellants argued that the Apex Court's decision in Vikram Cement case overruled the earlier ruling in J.K. Udaipur Udyog case, allowing CENVAT credit on inputs used away from the factory. The Tribunal noted the importance of considering the Apex Court's judgments in determining the admissibility of MODVAT credit, leading to the recall of the final order and the allowance of the appeal to the extent that the final order needed modification.

Consideration of Apex Court's Judgment in Vikram Cement Cases:
The Tribunal acknowledged that the decision in Vikram Cement cases, which favored the appellants regarding MODVAT credit on lubricants used in mining operations, was not considered during the initial proceedings. The Tribunal referred to the ruling of the Larger Bench in Hindustan Lever Ltd. case, emphasizing that failure to consider an Apex Court decision constitutes an error apparent on the face of the record under the doctrine of per incuriam. Consequently, the Tribunal recalled the final order and allowed the application for modification, highlighting the significance of considering relevant legal precedents in reaching decisions.

Applicability of Doctrine of Per Incuriam:
The Tribunal invoked the doctrine of per incuriam to address the issue of non-consideration of the Apex Court's judgment in Vikram Cement cases. By following the ruling of the Larger Bench, which emphasized the error in not taking into account relevant legal precedents, the Tribunal concluded that the failure to consider the Apex Court's decision constituted an error on the face of the record. This led to the decision to recall the final order and pass a fresh final order separately to rectify the oversight.

Limitation Issue Regarding Availing MODVAT Credit on Inputs:
The issue of limitation arose concerning the availing of MODVAT credit on inputs, specifically in relation to the amendment to Rule 57G of the Central Excise Rules, 1944. The learned SDR argued that the appellants were time-barred from claiming the MODVAT credit due to the limitation period set forth in the rule amendment, citing the decision in Osram Surya case by the Apex Court. This limitation issue was raised in connection with the potential allowance of the appeal on merits, highlighting the legal complexities surrounding the availing of MODVAT credit within the specified time frame.