2006 (8) TMI 9 - AT - Central Excise

Central Excise - Any decision contrary to Apex Court's ruling is an error apparent on record and rectification of such error to the made within the stipulated period and provisions of the law

Issues Involved:
1. Whether the Larger Bench decision in Gujarat State Fertilizers & Chemicals v. Commissioner of Central Excise stands overruled by the decisions of the Madras High Court and Gujarat High Court.
2. The power of the Tribunal to rectify an order based on subsequent decisions of the Supreme Court.
3. The applicability of the doctrine of per incuriam in the context of rectification of orders.

Issue-wise Detailed Analysis:

1. Overruling of the Larger Bench Decision in Gujarat State Fertilizers & Chemicals:
The core issue was whether the decision in Gujarat State Fertilizers & Chemicals v. Commissioner of Central Excise, Vadodara, reported in 2000 (122) E.L.T. 282 (Tri.-LB) was overruled by subsequent High Court decisions. The Tribunal noted that the decisions of the Madras High Court in V. Guard Industries Ltd. v. Commercial Tax Officer, Coimbatore, reported in 2003 (158) E.L.T. 806 (Mad.), and the Gujarat High Court in RPG Life Sciences Ltd. v. Union of India, reported in 2005 (187) E.L.T. 433 (Guj.), impliedly overruled the Larger Bench's decision. The Tribunal concluded that the matter required a formal overruling, which was beyond the purview of a three-member bench and thus referred it to a five-member bench.

2. Power to Rectify Orders Based on Subsequent Supreme Court Decisions:
The Tribunal examined whether it had the authority to rectify an order based on subsequent Supreme Court decisions. The Division Bench had previously allowed appeals by remand, relying on a decision later reversed by the Supreme Court in A. Infrastructure Ltd. v. Commissioner of Central Excise, Jaipur, reported in 2004 (167) E.L.T. 369 (S.C.). The Tribunal considered the argument that non-consideration of a Supreme Court decision constituted an error apparent on the record, warranting rectification under Section 35C(2) of the Central Excise Act, 1944. The Tribunal referenced several cases, including Sai Narayan Row v. Commissioner of Income Tax, to support this view.

3. Applicability of the Doctrine of Per Incuriam:
The Tribunal discussed the doctrine of per incuriam, which applies when a court or tribunal fails to consider a binding precedent. The Tribunal noted that non-consideration of a Supreme Court decision would constitute an error apparent on the face of the record. However, it also acknowledged that the doctrine of per incuriam does not apply to decisions rendered after the Tribunal's order. Despite this, the Tribunal emphasized that a subsequent binding decision of the Supreme Court declares the law as it always was, thus necessitating rectification of prior orders contrary to such decisions.

Conclusion:
The Tribunal, guided by the decisions of the Gujarat High Court in RPG Life Sciences Ltd. and the Madras High Court in V. Guard Industries Ltd., declared that the Larger Bench decision in Gujarat State Fertilizers & Chemicals stood overruled. The Tribunal emphasized that it was bound to rectify errors apparent on the record due to non-consideration of binding Supreme Court decisions.

Next Steps:
The matter was remanded to the appropriate Division Bench to decide the application for rectification of mistake on merits, without delving into whether there existed a mistake or valid grounds for rectification.

Pronouncement:
The judgment was dictated and pronounced in open court on 28-8-2006.

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