2019 (3) TMI 244 - HC - Central Excise

Validity of Corrigendum - Rectification of mistake - error apparent on the face of the records - Section 74 of the Finance Act, 1994 - Rebate claim - insufficient documents to allow he claim - Held that - The corrigendum issued was incompetent in so far as the provisions of Section 74 are concerned. The deletion of the interest granted cannot be deemed to be a mistake apparent from the record. It was a considered decision entered into by the First Appellate Authority and the interest payable would be in accordance with law i.e., the statute. There is in fact no correction or rectification of a mistake, especially since the grant of interest on a refund is a statutory consequence. The corrigendum was issued in excess of the power conferred under Section 74 - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Validity of issuing a corrigendum deleting a specific direction from the original order regarding payment of interest.

Analysis:
The case involved an appeal arising from a decision of the Customs, Excise and Service Tax Appellate Tribunal regarding a rebate claimed under a notification. The First Appellate Authority had remanded the matter for verification of the rebate amount. Subsequently, a corrigendum was issued deleting the direction to pay interest along with the rebate. The issue revolved around the validity of issuing this corrigendum under Section 74 of the Finance Act, 1994.

The key contention was whether the corrigendum deleting the direction to pay interest was a mistake apparent from the record. The court analyzed Section 74 of the Finance Act, which allows for rectification of mistakes in orders. The court held that the deletion of the interest payment direction was not a mistake as it was a considered decision and a statutory consequence. The court emphasized that interest on a refund is a statutory entitlement under Section 11BB of the Central Excise Act.

Furthermore, the court noted that the corrigendum effectively reduced the refund amount by modifying the interest liability without issuing a notice, as required when enhancing the liability of the assessee. The court highlighted that the revenue did not challenge the original order granting the interest, which was a statutory consequence. Therefore, the corrigendum was deemed to exceed the authority conferred under Section 74.

In conclusion, the court rejected the appeals and upheld the Tribunal's order, emphasizing that the corrigendum deleting the direction to pay interest was invalid as it interfered with a statutory entitlement and exceeded the powers under Section 74.