2017 (11) TMI 1179 - HC - Central Excise

Rectification of mistake - CENVAT/MODVAT credit - inputs used in manufacture of Aluminum Slugs and Containers - denial on the ground that it were only paper transactions and that the appellants willfully suppressed the facts - Held that - Law is well settled. When a Court or a Tribunal records that a particular submission was made across the bar, the correctness of the recording as to what transpired before the Court or Tribunal cannot be gone into by a higher forum in Appeal or Revision. If it is recorded that a particular submission was canvassed, it is a recording of what transpired before the concerned Court or Tribunal. Unless what is recorded is corrected by the same Court or Tribunal, the Higher forum which deals with an appeal or a revision will have to proceed on the footing that the factual statements recorded in the impugned judgment are correct. Sub Section (2) of Section 35C gives a specific remedy to a party to appeal to apply for rectifying mistakes apparent from the record. As in the order passed in the rectification application, the main issue canvassed in the rectification application has not been gone into, it is not open for us to adopt inferential process and decide whether the said points set out in the rectification application were urged before the Appellate Tribunal - the Tribunal has committed an error by not considering the specific case made out in the rectification application as especially when in the impugned judgment in the appeal, the gist of the submissions made by the parties have not been specifically incorporated. To avoid possibility of any prejudice to the appellant, it will be appropriate if by setting aside the impugned judgment and order, the Appellate Tribunal is directed to hear the appeal afresh - appeal allowed in part - part matter on remand.

Summary

Issues involved:
Alleged wrong availment of Modvat credit on inputs used in manufacture of Aluminum Slugs and Containers under Chapter 76 of the Central Excise Tariff Act, 1985. Application for rectification of judgment.

Issue 1: Alleged wrong availment of Modvat credit
The appeal challenged a judgment by the Customs, Excise and Service Tax Appellate Tribunal regarding the denial of Modvat credit on inputs used in manufacturing Aluminum Slugs and Containers. The Collector of Central Excise issued Show Cause Notices in 1993 and 1994 alleging paper transactions and willful suppression of facts. The proceedings were initially dropped but later confirmed, imposing penalties. The appellant appealed against the order, leading to a reduction in penalties. The Division Bench admitted the appeal, framing substantial questions of law. The appellant filed a rectification application under Section 35C(2) of the Central Excise Act, 1944, claiming that their submissions were not considered by the Tribunal.

Issue 2: Application for rectification of judgment
The appellant contended that their submissions before the Appellate Tribunal were not adequately addressed in the judgment. The rectification application highlighted specific points argued before the Tribunal that were allegedly not dealt with. The Tribunal's order on the rectification application was challenged, as it did not address whether the submissions were made during the appeal hearing. The High Court emphasized the importance of accurately recording submissions made during proceedings and the limited scope for higher forums to review factual statements unless corrected by the lower court or tribunal.

Analysis:
The High Court found that the Tribunal erred in not considering the specific case presented in the rectification application, especially when the judgment did not incorporate a detailed summary of the parties' submissions. Given the unavailability of the original Tribunal members for rectification, the Court set aside the Tribunal's order on the rectification application and directed a fresh hearing of the appeal. The Court stressed the need for a brief summary of submissions in judgments to facilitate appeals. The appeal was partly allowed, remanding the case for fresh hearing while keeping all contentions on merits open.

This detailed analysis covers the issues of alleged wrong availment of Modvat credit and the application for rectification of judgment, providing a comprehensive overview of the judgment by the Bombay High Court.