2020 (3) TMI 459 - HC - Service Tax

Rectification of Mistake - Error apparent on the face of record or not - benefit of the extended period was denied on the ground that the Appellant had not invoked the plea, or that it was a registered as a not-profit organization under the Societies Registration Act, 1860. Whether the CESTAT suffered from any error apparent on face of record in light of the contention of the appellant that it had on numerous instances invoked the plea of the extended period? HELD THAT - Honorable Supreme Court in COMMISSIONER OF CENTRAL EXCISE, MUMBAI VERSUS BHARAT BIJLEE LIMITED 2006 (4) TMI 136 - SUPREME COURT has held that Failure to take into considerations the material evidence, which is present on the record, would certainly amount to mistake apparent on the face of record and the tribunal under the circumstances would have the jurisdiction to correct the said mistake in exercise of its powers under Section 35C(2) of the Act. In light of Bharat Bijlee Ltd., it is amply clear that the failure to consider material evidence on record, would amount to mistake apparent on the face of record, and hence, the failure of the CESTAT to take into consideration the plea of the appellant regarding extended time period, at numerous instances as delineated above, amounts to mistake apparent on the face of record. The CESTAT, while dismissing the application for rectification of mistake, has gravely erred in failing to take note of the same, despite making a note of the argument by the counsel for the applicant therein, that the plea invoking extended period has been iterated more than once in the order of the Adjudicating Authority. In such a circumstance, we can not uphold the impugned order and thus, the impugned order is set aside - appeal allowed - Matter restored before CESTAT - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the Final order by the CESTAT, dated 20th March 2018, suffers from any error apparent on the face of the record.
2. Whether the CESTAT has wrongly dismissed the rectification of mistake application.

Detailed Analysis:

1. Error Apparent on the Face of the Record:
The appellant, a society registered under the Societies Registration Act, 1860, challenged the CESTAT's final order dated 20th March 2018, which confirmed the demand of Service Tax along with interest and penalties. The appellant argued that the CESTAT failed to consider their plea regarding the extended period of limitation, which had been raised at various stages of the adjudication process. The appellant submitted detailed instances where this plea was raised, indicating that the plea was not new and should have been considered by the CESTAT.

The court referred to the judgment of the Honorable Supreme Court in Commissioner of Central Excise, Mumbai v. Bharat Bijlee Ltd. 2006 (198) E.L.T. 489 (SC), which held that failure to consider material evidence present on the record amounts to a mistake apparent on the face of the record. Based on this precedent, the court concluded that the CESTAT's failure to consider the appellant's plea regarding the extended period of limitation constituted an error apparent on the face of the record. Therefore, the first substantial question of law was answered in the affirmative.

2. Dismissal of the Rectification of Mistake Application:
The appellant filed a rectification of mistake application under Section 35C of the Central Excise Act, 1944, which was dismissed by the CESTAT on 8th March 2019. The CESTAT held that the scope of rectification of mistake was limited and that the appellant was essentially seeking a review of the order under the guise of rectification. The appellant contended that their plea regarding the extended period of limitation had been raised multiple times and should have been considered.

The court noted that the CESTAT had erred in dismissing the rectification of mistake application without considering the appellant's plea regarding the extended period of limitation. The court emphasized that the failure to consider this plea, which was raised at various stages, amounted to a mistake apparent on the face of the record. Consequently, the court set aside the impugned order and remanded the matter back to the CESTAT for fresh consideration of the rectification of mistake application in accordance with the law.

Conclusion:
Both substantial questions of law were answered in favor of the appellant. The order passed by the CESTAT on 8th March 2019 was quashed and set aside. The matter was remanded back to the CESTAT, New Delhi, for fresh consideration of the rectification of mistake application. The appeal was allowed and disposed of accordingly.