2016 (5) TMI 680 - HC - Service Tax

Rectification of mistake - Section 74 of the Finance Act 1994 - Demand of Service tax in terms of Section 73 of the Act on residential complex service - Petitioner contended that the sum of 41, 14, 69, 442/- referred to by them before the assessing authority was a typographical mistake and the correct receipts for the project of construction of 928 houses for the Financial Year 2008-09 was only 4, 14, 69, 442/-. Held that - in the exercise of its Certiorari jurisdiction this Court would not re-appreciate findings of fact recorded by the Commissioner in his order. It is only if the order were to suffer from an error apparent on the face of the record would there be any justification to interfere with the impugned order. We are satisfied that the impugned order does not suffer from any such infirmity. As the scope of Section 74(1) of the Act for rectification of a mistake is limited and as the statements made by the petitioner at different points of time are inconsistent we see no reason to interfere with the well-reasoned order passed by the Commissioner. Rejection of the application for waiver of pre-deposit by the CESTAT would only enable the respondent to collect the amount demanded from the petitioner towards service tax interest and penalty. It would not result in the dismissal of the appeal itself. As the CESTAT has the power to examine the material on record reappreciate the evidence and arrive at a finding different from that of the adjudicating authority we request the CESTAT to hear and decide the appeal with utmost expedition. - Decided against the petitioner

Summary

Issues:
1. Rectification of mistake under Section 74 of the Finance Act, 1994.
2. Jurisdiction to seek rectification while appeal pending before CESTAT.
3. Rejection of rectification application by Commissioner of Central Excise.
4. Scope of Section 74(1) of the Act for rectification of mistake.
5. Review of order passed by the assessing authority.
6. Certiorari jurisdiction of the Court over the Commissioner's decision.
7. Justification for interference with the impugned order.
8. Effect of rejection of application for waiver of pre-deposit by CESTAT on the appeal.

1. Rectification of mistake under Section 74 of the Finance Act, 1994:
The petitioner sought rectification of a typographical error in the adjudication order related to the amount received for a construction project. The Commissioner rejected the application, emphasizing that the mistake was not apparent from the record and the figures provided by the petitioner were inconsistent with the actual receipts. The Court upheld the Commissioner's decision, stating that the power under Section 74(1) is to rectify mistakes evident from the record, not to review self-induced errors by the petitioner.

2. Jurisdiction to seek rectification while appeal pending before CESTAT:
The Division Bench allowed the petitioner to seek rectification under Section 74(2) even with an appeal pending before CESTAT, asserting that the power of rectification remains with the original authority until the appeal is decided. This decision enabled the petitioner to apply for rectification despite the ongoing appellate proceedings.

3. Rejection of rectification application by Commissioner of Central Excise:
The Commissioner denied the rectification application, highlighting discrepancies in the petitioner's submissions and attachments related to the alleged mistake in the order. The Commissioner concluded that there was no mistake apparent from the record justifying rectification under Section 74, leading to the rejection of the petitioner's claim.

4. Scope of Section 74(1) of the Act for rectification of mistake:
The Court clarified that the authority can rectify mistakes only if they are evident from the record before them. It emphasized that the jurisdiction under Section 74(1) does not allow the assessing authority to review its previous orders based on errors made by the petitioner, limiting rectification to mistakes apparent on the face of the record.

5. Review of order passed by the assessing authority:
The Court stated that it would not reevaluate factual findings made by the Commissioner unless there is a clear error on the face of the record. It emphasized that the assessing authority can rectify mistakes only if they are apparent and not subject to reexamination of findings based on inconsistent statements by the petitioner.

6. Certiorari jurisdiction of the Court over the Commissioner's decision:
The Court asserted its Certiorari jurisdiction, indicating that it would intervene only if the Commissioner's order displayed a clear error on the face of the record. It emphasized that interference would be justified only in cases where the impugned order suffers from a significant infirmity, which was not the case in this instance.

7. Justification for interference with the impugned order:
The Court found no reason to interfere with the Commissioner's well-reasoned decision as the rectification application did not meet the criteria under Section 74(1) for rectifying mistakes apparent from the record. The rejection of the application for waiver of pre-deposit by CESTAT was noted to allow the respondent to collect the demanded amount without dismissing the appeal itself.

8. Effect of rejection of application for waiver of pre-deposit by CESTAT on the appeal:
The Court highlighted that the rejection of the application for waiver of pre-deposit by CESTAT did not lead to the dismissal of the appeal but enabled the respondent to collect the demanded amount. It urged CESTAT to expedite the appeal process, emphasizing its authority to reevaluate evidence and reach independent conclusions. The writ petition was dismissed, with no costs awarded.

Miscellaneous:
Any pending miscellaneous petitions were also dismissed in line with the decision on the writ petition.