APPELLATE TRIBUNAL CANNOT CHANGE ORDER FROM REMAND TO DISMISSAL OF APPEAL THROUGH ORDER ON RECTIFICATION OF MISTAKE

[Mr. M. GOVINDARAJAN]

Sec. 35 (1) of the Central Excise Act, 1944 provides that the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as per the Appellate Tribunal may think, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.

Sec. 35 (2) provides that the Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to the notice by the Commissioner of Central Excise or the other party to the appeal.

In some cases the Appellate Tribunal remand the matter to the Original Authority for conducting the case afresh. Some of the reasons for remanding the cases by the Appellate Tribunal are as follows:

§         Not following the Principles of Natural Justice;

§         Not considering the documents placed before the authorities;

§         Non supply of documents to the assessee for effective defence;

§         Non application of mind on the principles of law and procedure;

§         Passing of non-speaking and reasoned order.

In such cases, the Tribunal held in one case that the adjudicating authority shall not pass disadvantageous or onerous order against the assessee in the remand back proceedings.

The issue to be discussed in the article is whether the Appellate Tribunal can change order from remand to dismissal of appeal through order on rectification of mistake. Dismissal of appeal may arise for non appearance of respondents or on the merits of the case. Rectification of mistake will be done on the application within the prescribed time limit if there is any mistake apparent from the record. Therefore application for rectification of mistake and disposal of appeal are separate procedures.  The issue taken for this article is discussed with the reference of the decided case law in 'Philips Electronics India Ltd., V. Commissioner of Central Excise, Pune - I' - 2009 (16) STR 523 (Bom).

The present appeal is filed by the appellant against the order of the tribunal in which the tribunal dismissed the appeal on the application filed by the appellant for rectification of mistake. In the earlier order the tribunal found that the assessee had not discharged the burden cast upon them to prove that the duty burden on the product has not been passed on to their buyers.   The appellants prayed that another opportunity be extended to them to produce further evidence on this aspect. The tribunal accepted the prayer and remanded the issue as to whether the duty burden on the product has been passed on to the assessee's buyers or not, to the adjudicating authority for fresh decision after extending a reasonable opportunity to the appellants of being heard in their defence and producing such evidence as they deem necessary to substantiate their case.

On this the appellant filed an application for rectification of mistake before the Tribunal. In the application for rectification the appellant contended that it was wrongly recorded in the order of the Tribunal that the appellant had requested for grant an opportunity to lead further evidence. The application for rectification of mistake was considered by the Tribunal. The Tribunal accepted the prayer for rectification and held that the assessees have not discharged the burden cast upon them to prove that the duty burden on the product has not been passed on their buyers. The Tribunal dismissed the appeal.

The appellant, aggrieved against the order of Tribunal on the application for rectification of mistake filed the present appeal.  The High Court held as follows-

§         If the Tribunal found that it has wrongly recorded in the order that the appellant made a request for grant of an opportunity whether the proceedings need to be remanded or they are to be finally decided by the Tribunal but the order  in the rectification application shows that no reasons have been recorded by the Tribunal;

§         A decision as to whether a matter needs to be remanded back or is to be finally decided, is to be taken by the Tribunal by applying the settled principles of law;

§         A decision to remand the matter back cannot be taken only because a party makes a request for grant of an opportunity to lead further evidences;

§         If the tribunal had taken a judicial decision that the proper order in the matter was remand of the proceedings, then before changing that order, the tribunal was obliged to give reasons;

§         Whether the matter needs to be remanded or not is a matter of judicial decision to be taken on the basis of the record and not because some party makes a request or does not makes a request;

§         The application for rectification was seeking a deletion of sentence where the tribunal recorded that the appellant had made a request;

§         In such rectification application either that statement could have been deleted or retained. The tribunal could not have changed the order from remand to dismissal of the appeal;

§         The procedure adopted by the Tribunal cannot be said to be in accordance with law;

§         The Tribunal should be required to re-apply its mind to the appeal and decide it in accordance with law;

§         The order of the Tribunal impugned in the appeal to the extent it is challenged is set aside and the appeal is remanded back to the Tribunal for de  novo consideration and decision in accordance with law to above indicated extent.