2015 (1) TMI 130 - AT - Central Excise

Recall of order - Revenue contended that the previous order 2013 (6) TMI 391 - CESTAT NEW DELHI was passed on the strength of documents which on later enquiry were found to be fraudulent - Held that - It is axiomatic and a principle which is well established that the power of review, of a judicial or quasi-judicial order should be expressly and legislatively conferred. Section 35C(2) of the Act does provide but not an uncanalised and unrestricted power of review/rectification. Grant of the power (of rectification) is subject to a specified limitation period and is authorised to be exercised in clearly specified circumstances, namely for rectification of a mistake apparent from the record. - These applications by Revenue fall outside the ambit of the rectification power consecrated to us qua the express legislative grant under Section 35C(2) of the Act. Revenue does not plead nor establish before us that order dated 15.2,2013 is vitiated on account of any fraudulent document which was the basis for the conclusion as to illegality of invoking the extended period of limitation. Revenue s contention is that the declarations dated 14.4.2003 and 12.4.2004 (relevant to financial years 2003-04 and 2004-05) were never filed by assessee. This assertion is predicated on the fact that originals of these declarations are not currently available in Revenue records. Inference that the assessee did not file these declarations is based on the singular fact that there are overwritings/ interpolations in the receipt register of 2003-04, as opined by the Forensic Consultant. On the basis of this opinion, Revenue seamlessly proceeds to conclude that the interpolations were the product of a collaborative effort of some unknown officers of the Department, at the behest of or in connivance with the assessee. There is no interconnecting evidentiary material furnished for this ethereal leap to the conclusion. Nothing is placed before us to establish whether any departmental officer was found guilty of interpolations of the receipt register. No inculpatory statement was recorded from the assessee to support any conclusion as to its participation in tampering of Government records; No officer in-charge of pursuing the case of Revenue during 2006 to 2013 (pendency of the appeal), has been proceeded against for failing to rebut assessee s pleadings or to verify existence of the declarations in official records. - Revenue failed even by date to establish perpetration of any fraud by the assessee, on the basis of which these appeals were allegedly allowed; and failed to establish that the assessee had not submitted the declarations on 14.4.2003 and 12.4.2004 - Revenue failed to establish fraud as the factor vitiating our earlier order dated 15.2.2013 - Decided in favour of assessee.

Issues Involved:
1. Recall of the final order dated 15.2.2013.
2. Restoration of appeals for fresh hearing.
3. Permission for the Department to produce additional evidence.
4. Validity of the extended period of limitation.
5. Allegations of fraud and tampering of records.

Detailed Analysis:

1. Recall of the Final Order Dated 15.2.2013:
Revenue sought to recall the final order No. 55592-55593/2013-Ex.(Br.) dated 15.2.2013, arguing that the order was based on fraudulent documents. The Tribunal concluded that the applications by Revenue fell outside the ambit of the rectification power under Section 35C(2) of the Central Excise Act, 1944, which allows for rectification only in cases of mistakes apparent from the record. The Tribunal noted that the power of review must be expressly and legislatively conferred and is subject to a specified limitation period.

2. Restoration of Appeals for Fresh Hearing:
Revenue requested the restoration of the appeals for fresh hearing. The Tribunal observed that the Revenue had failed to contest the specific facts pleaded by the assessee for nearly seven years. The Tribunal emphasized that the assertions of the assessee regarding the filing of declarations were uncontested and unverified, and thus, on principles of non-traverse, the assertions of the assessee stood established.

3. Permission for the Department to Produce Additional Evidence:
Revenue sought permission to produce additional evidence, including forensic reports indicating tampering with receipt registers. The Tribunal noted that while there were interpolations/overwritings in the receipt registers, there was no substantive evidence establishing a nexus between the interpolations and the assessee's participation. The Tribunal highlighted the lack of any inculpatory statements or other evidence to support the assertion of the assessee's role in tampering with the records.

4. Validity of the Extended Period of Limitation:
The Tribunal concluded that the initiation of proceedings was barred by limitation, as there was no suppression or misstatement on the part of the assessee. The Tribunal noted that the assessee had filed declarations disclosing the value of clearances, and the Revenue had failed to contest these declarations for nearly seven years. The Tribunal emphasized that the extended period of limitation could not be invoked without justification.

5. Allegations of Fraud and Tampering of Records:
Revenue alleged that the declarations were not filed by the assessee and that entries in the receipt register were tampered with. The Tribunal observed that the inference of fraud was based solely on overwritings in the receipt register, without any substantive evidence linking the assessee to the tampering. The Tribunal noted that no departmental officer was found guilty of interpolations, and no inculpatory statements were recorded from the assessee. The Tribunal concluded that Revenue failed to establish fraud as the factor vitiating the earlier order dated 15.2.2013.

Conclusion:
The Tribunal rejected the miscellaneous applications on the grounds of limitation under Section 35C(2) and the failure of Revenue to establish fraud. The Tribunal emphasized that the assertions of the assessee regarding the filing of declarations were uncontested and that the extended period of limitation was unjustified. The applications were found to be misconceived and were accordingly rejected. No costs were awarded.

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