2003 (12) TMI 59 - SC - Central Excise

Whether the Tribunal could have set aside the earlier order passed by it under Sec. 35C of the Central Excise Act? Held that - Although the ground for rectification, namely, an error on the face of the record may be common to a power for review, the nature of the power to be exercised in the two cases is distinct. The power of review is not limited to rectification and is wider than the power conferred under Sec. 35C(2). We are unable to hold that the error was a manifest one which could admit of no dispute. It was a debatable point which was raised, and the conclusion of the Tribunal in the impugned order clearly shows that it has considered the question from the point of view of the sufficiency of the material to justify the demand raised. In the circumstances of the case we allow the appeals and set aside the impugned order of the Tribunal. We are told that the respondent has in the meanwhile filed a reference application under Sec. 35G of the Act before the Tribunal. In view of our order, the Tribunal can now hear and dispose of that application as expeditiously as is conveniently possible.

Summary

Issues:
1. Tribunal's authority to set aside its earlier order under Sec. 35C of the Central Excise Act.

Analysis:
The case involved a dispute regarding the alleged suppression of Cold Rolled Coils by the respondent from its returns filed under the Central Excise Act. After the Commissioner upheld the demand and imposed a penalty, the respondent appealed to the Tribunal. The Tribunal initially upheld the demand but reduced the penalty. The respondent then sought rectification of the order, arguing that the evidence relied upon by the Department did not conclusively prove suppression. The Tribunal accepted the rectification application and set aside the demand, stating that the Department had not produced sufficient material to establish the figures of production were incorrect beyond a reasonable doubt.

The appellant contended that the Tribunal erred in exercising jurisdiction under Sec. 35C by rehearing and redeciding the matter. Citing previous court decisions, the appellant argued that the power to amend under Sec. 35C was limited to correcting errors not requiring further investigation. On the other hand, the respondent argued that the Tribunal had correctly rectified its omission in not addressing the crucial contention, pointing out that several court orders had remanded matters back to the Tribunal for reconsideration when points were omitted. The respondent claimed the Tribunal had inherent jurisdiction to rectify such errors to prevent litigants from suffering due to Tribunal actions.

The Supreme Court analyzed the power of review and rectification under Sec. 35C of the Act. While the ground for rectification may be common to a power for review, the nature of the powers is distinct. The Court held that the error in this case was debatable and not manifest, as the Tribunal had considered the sufficiency of the material to justify the demand. Consequently, the Court allowed the appeals, setting aside the Tribunal's order and directing the Tribunal to hear and dispose of the reference application filed by the respondent expeditiously. No costs were awarded in the matter.