2018 (9) TMI 1577 - AT - Central Excise

Rectification of Mistake apparent from record - area based exemption - whether the issue canvassed in rectification application was raised before the authority whose order is prayed to be rectified? - Held that - The appellant has sought exemption on the basis of Notification. It is an admitted fact that the exemption was available only after the compliance of conditions mentioned therein. It is also an admission that one of the condition was not complied with at the time of availing the exemption. The record also makes it clear that the said condition was complied after a delay of four years. The Order under challenge has denied the benefit to the applicant/appellant denying it to be retrospectively available. In the given circumstances, it becomes clear that the issue still remains is as to whether the compliance of condition can be given a retrospective effect. Irrespective of the Adjudicating Authority has decided it in favour of the Department, it still is a debatable issue. The aggrieved party has a remedy to take this debate to a higher forum, but the same cannot be considered as an error apparent on record. Larger Bench in the case of Gujarat State Fertilizers and Chemicals Vs. C.C.E. Vadodara 2000 (9) TMI 1068 - CEGAT, NEW DELHI has held that a subsequent proceeding is not a ground for reopening a concluded proceeding and passing fresh Order. Application dismissed.

Summary

Issues involved:
1. Rectification of mistake regarding compliance with conditions for availing area-based exemption under Notification No. 50/2003.
2. Denial of benefit under Notification 50/2003 despite various grounds raised by the appellant.
3. Whether the non-filing of declaration is a procedural mistake justifying rectification.
4. Interpretation of Section 35C(2) of the Central Excise Act, 1944 regarding rectification of mistakes apparent from the record.
5. Retrospective effect of compliance with conditions for availing exemption under Notification 50/2003.

Issue 1: The appellant sought rectification of a mistake in complying with conditions for availing area-based exemption under Notification No. 50/2003. The appellant failed to file the declaration with the respondent Department at the time of the first clearance of goods. However, the appellant later voluntarily filed the declaration along with returns, stating the date of exercising the option as the date of commencement of commercial production. The Tribunal considered whether this mistake could be rectified under the relevant provisions.

Issue 2: The appellant raised various grounds before the Tribunal to challenge the Order-in-Original denying the benefit under Notification 50/2003. Despite the appellant's arguments, the benefit was still denied. The Tribunal examined whether the denial of benefit was justified and whether the rectification was warranted.

Issue 3: The appellant argued that the non-filing of the declaration was a procedural mistake for which substantial benefit should not be denied. Citing precedents, the appellant contended that the error was apparent on record and sought rectification based on this argument. The Department, however, contended that the alleged reason did not fall under the scope of rectification as it was a matter of opinion.

Issue 4: The Tribunal analyzed Section 35C(2) of the Central Excise Act, 1944, which allows for the rectification of mistakes apparent from the record. The Tribunal emphasized that the provision permits rectification only for errors that are evident on the record. The Tribunal considered the scope of rectification under this provision and the conditions that must be met for rectifying an order.

Issue 5: The Tribunal deliberated on whether the compliance with conditions for availing exemption under Notification 50/2003 could be given retrospective effect. Despite the appellant's argument that the compliance was delayed but eventually fulfilled, the Tribunal held that the issue of retrospective effect was debatable. Citing legal precedents, the Tribunal concluded that the matter was not an error apparent on record and dismissed the application for rectification.