2017 (3) TMI 1368 - AT - Service Tax

Rectification of mistake - The applicant's claim that the mistake that have crept into the order is that even though the applicant is entitled to the benefit prescribed under the first proviso to Section 78 of the FA, 1994, the Tribunal in its order has not extended the said benefit to the applicant - Held that - such claim has never been raised since the proceeding for recovery of service tax initiated against the Appellant. Undisputedly also, the issue was neither raised before any of the forums nor before this Tribunal and sought to be raised for the first time through this rectification application - The present relief, which the applicant seeks through the rectification application, would be possible only in exercise of the power to review the order, by reassessing/reappreciation of the evidence and undertaking detail examination of the records - ROM application rejected.

Summary

Issues:
Rectification of mistake in the order passed by the Tribunal dated 29.6.2015; Entitlement to benefit under the first proviso to Section 78 of the Finance Act, 1994; Jurisdiction of the Tribunal to reopen facts and consider arguments; Scope of power of rectification by the Tribunal; Limitation period for filing rectification application.

Analysis:
The appellant filed a Miscellaneous Application seeking rectification of a mistake in the Tribunal's order. The appellant claimed entitlement to the benefit under the first proviso to Section 78 of the Finance Act, 1994, for reduction of penalty to 50% of the service tax short levied. However, this benefit was not claimed at any previous stage of the proceedings. The Tribunal was urged to reconsider the issue, but the Respondent-Revenue argued that the Tribunal cannot reopen facts not previously raised, as it would amount to a review of the order. The Respondent contended that the power of rectification is limited to mistakes apparent on the face of the record. Additionally, the Respondent argued that the rectification application was filed after the prescribed limitation period of six months, citing relevant case law.

The Tribunal noted that the appellant had unsuccessfully challenged the order before the High Court but filed a rectification application claiming a mistake in not extending the benefit under the first proviso to Section 78. The Tribunal observed that the issue was never raised before and sought to be raised for the first time through the rectification application. The Tribunal held that granting the relief sought by the appellant would require a review of the order, involving reassessment of evidence and examination of records, which falls outside the limited power of rectification. Citing relevant case law, the Tribunal emphasized that rectification cannot involve reappreciation of evidence not previously argued. The Tribunal rejected the rectification application as devoid of merit.

In conclusion, the Tribunal held that the rectification application was not maintainable as it sought a relief that required a review of the order, which exceeded the limited power of rectification. The application was rejected on the grounds that the issue was not raised previously, and granting the relief would involve reappreciation of evidence, which is beyond the scope of rectification.