2017 (8) TMI 596 - HC - Central Excise

Power to review - scope of Section 35 C (2) of the Central Excise Act, 1944 - Classification of goods - HDPE Tapes - the trade claimed that the goods were articles of plastic classifiable under Chapter 39 of the Central Excise Tariff, whereas the view of the Revenue was that they were textile goods classifiable under Chapter 54 of the Tariff - rectification of mistake - Held that - The plain and simple reading thereof would clearly reflect that the tribunal does not have any power to review the order and the purport and scope of Section 35 C (2) of the Central Excise Act, 1944 is limited to rectifying the mistake only and that too the error or mistake apparent on the face of record. This provision is not required to be so enlarged as to clothe the tribunal with the power of reviewing its own order, which otherwise is conspicuous lacking in the statutory provision of the Central Excise Act. The Court is of the considered view that the entire application, which was made in the month of March 2017 in which the department sought to rectify the mistake of tribunal was completely misconceived and not tenable in eye of law. There was, therefore, no cause of action whatsoever for allowing the application, which would have given no jurisdictional facts to the tribunal for exercising any power under Section 35 C (2) of the Central Excise Act. Hence, the order passed by the tribunal on the application recalling the order dated 29th September 2016 is patently erroneous and not tenable in eye of law and is required to be quashed and set aside. Petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Jurisdiction and scope of Section 35C(2) of the Central Excise Act, 1944.
2. Legality of the Appellate Tribunal's order recalling its previous order dated 29th September 2016.
3. Impact of non-listing of connected appeals on the final decision.
4. Examination of the tribunal's power to rectify mistakes versus reviewing orders.

Issue-wise Detailed Analysis:

1. Jurisdiction and Scope of Section 35C(2) of the Central Excise Act, 1944:
The court examined the purport and scope of Section 35C(2) of the Central Excise Act, 1944, which allows the Appellate Tribunal to rectify any mistake apparent from the record. The court clarified that this provision is limited to rectifying typographical or clerical errors or omissions in the order and does not extend to reviewing the order on merits. The court emphasized that the tribunal does not possess the power to review its own order under this section, which is limited to correcting apparent mistakes on the record.

2. Legality of the Appellate Tribunal's Order Recalling its Previous Order Dated 29th September 2016:
The court found that the Appellate Tribunal's order dated 14th June 2017, which recalled its previous order dated 29th September 2016, was patently erroneous and not tenable in the eyes of the law. The tribunal had recalled the order on the ground that a connected appeal (Appeal No. E/1483/2010) was not listed for hearing along with Appeal No. E/1585/2009. The court held that the tribunal's power under Section 35C(2) does not extend to recalling an order passed on merits after a full hearing. The tribunal's action was deemed beyond its jurisdiction as it amounted to exercising review power, which is not conferred by the statute.

3. Impact of Non-Listing of Connected Appeals on the Final Decision:
The court noted that the non-listing of Appeal No. E/1483/2010 for hearing along with Appeal No. E/1585/2009 could not constitute a ground for recalling the final order passed on merits. The tribunal had directed the registry to list both appeals together, but the failure to do so was an error on the part of the registry, not the tribunal. The court emphasized that such administrative errors do not justify recalling a final order made on merits after a bipartite hearing.

4. Examination of the Tribunal's Power to Rectify Mistakes Versus Reviewing Orders:
The court underscored the distinction between rectifying mistakes and reviewing orders. It reiterated that the tribunal's power under Section 35C(2) is confined to correcting mistakes apparent on the record, such as typographical or clerical errors. The tribunal cannot recall an entire order based on an administrative oversight or an error in listing connected appeals. The court cited several precedents to support this interpretation, including *Roots Multiclean Ltd. Vs. CESTAT, Chennai*, *Commissioner of Income Tax, Bangalore Vs. Mc Dowell and Co. Ltd.*, *CCE, Jaipur Vs. Hindustan Zinc Ltd.*, and *CCE, Belapur, Mumbai Vs. RDC Concrete (India) Pvt. Ltd.*

Conclusion:
The court quashed and set aside the Appellate Tribunal's order dated 14th June 2017, restoring the order dated 29th September 2016. The court observed that the tribunal's action of recalling the final order was without jurisdiction and amounted to an impermissible review. The court also noted that any challenge to the merits of the order dated 29th September 2016 should be pursued through appropriate proceedings, not under Section 35C(2) of the Central Excise Act. The petition was allowed, and the rule was made absolute without any order as to costs.