2019 (3) TMI 829 - AT - Customs

Rectification of mistake - power of Appellate Tribunal u/s 129B(2) of the Act to rectify mistake - scope of 'mistake' and 'apparent' - Held that - It is no doubt true that evidence cannot be re-appreciated to come to a different conclusion and that mistake apparent from the record cannot be something which is established by a long drawn process of reasoning of points on which there may conceivably be two opinions, but it is equally true that the purpose behind the enactment of Section 129B(2) of the Act is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal and that if a decision is based on a material which could not have been used, then the Tribunal would have the power to rectify the mistake. If the Tribunal has not considered the material evidence which was available on the record, it would amount to a mistake apparent on the face of the record and the Tribunal would have the jurisdiction to correct the said mistake. It is not merely an arithmetical or clerical mistake that can be rectified because mistake in taxation laws has a different connotation and is mostly subjective. The mistake should be such which no Court would permit it to remain on the record for rectification of the order stems from the fundamental principle that justice is above all. If a decision is based solely on a material which is irrelevant or could not have been used then the mistake can be rectified. When it has been brought to the notice of the Tribunal that an issue was framed by the Commissioner of Customs (Preventive), Jodhpur as to whether the Commissioner of Customs (Preventive) had the jurisdiction to issue the show cause notice and a detailed finding has been recorded that it had the jurisdiction, then it would be a fit case for exercise of powers under Section 129B(2) of the Act to rectify the mistake committed by Tribunal, which mistake is so apparent on the face of the record. The Appeals were disposed of earlier on 11 August, 2017 by remanding the matter to the adjudicating authority for taking a fresh decision as the parties had agreed that the Commissioner of Customs (Preventive), Jodhpur was not the competent authority to issue notice. To rectify this mistake of the Tribunal, the entire order dated 11 August, 2017 would have to be recalled. It can be urged that this may not amount to rectification of mistake in the Final Order, but, in the peculiar facts and circumstances of the case, as it has been found that the Tribunal committed a mistake in view of the consent given by the Respondent against the record, it has become necessary to recall the Final Order, as the issues raised in the Appeals, including that relating to jurisdiction of the Commissioner of Customs (Preventive) to issue the notice, have now to be decided on merits. Thus, it is a fit case for exercising the powers under Section 129B of the Act to correct the mistake apparent from the record and, accordingly, recall the order dated 11 August, 2017 - Let the Appeals be listed on 13 March, 2019.

Summary

Issues Involved:
1. Competency of the Commissioner of Customs (Preventive), Jodhpur to issue the show cause notice.
2. Alleged mistake apparent from the record in the Tribunal's final order.
3. Jurisdictional and procedural aspects under Section 129B(2) of the Customs Act, 1962.
4. Impact of prior judicial decisions on the Tribunal's ruling.
5. Procedural propriety of rectification applications filed by the Department.

Detailed Analysis:

1. Competency of the Commissioner of Customs (Preventive), Jodhpur to Issue the Show Cause Notice:
The core issue was whether the Commissioner of Customs (Preventive), Jodhpur had the jurisdiction to issue a notice under Section 18(2) of the Customs Act, 1962 for the provisional assessment of imported machinery. The Tribunal initially remanded the matter, influenced by the parties' agreement that the Commissioner lacked jurisdiction, referencing the Delhi High Court decision in Mangali Impex Ltd. vs Union of India. However, the Department later contended that the Commissioner did have jurisdiction, as elaborated in the Commissioner's detailed order and supported by the Rajasthan High Court's dismissal of a related writ petition.

2. Alleged Mistake Apparent from the Record in the Tribunal's Final Order:
The Department filed rectification applications, claiming that the Tribunal's final order contained a mistake apparent from the record, as it was based on an incorrect admission regarding the Commissioner's jurisdiction. The Tribunal acknowledged that the error was due to the parties' statements during the hearing and recognized the need to rectify it under Section 129B(2) of the Act.

3. Jurisdictional and Procedural Aspects under Section 129B(2) of the Customs Act, 1962:
Section 129B(2) allows the Tribunal to amend any order to rectify a mistake apparent from the record within six months. The Tribunal emphasized that such a mistake must be patent and obvious, not requiring elaborate argument or evidence. The Supreme Court's interpretations in Deva Metal Powders (P) Ltd. and other cases were cited to clarify the scope of "mistake apparent from the record."

4. Impact of Prior Judicial Decisions on the Tribunal's Ruling:
The Tribunal considered the Supreme Court's rulings in cases like Deva Metal Powders (P) Ltd., Saurashtra Kutch Stock Exchange Ltd., and Honda Siel Power Products Ltd., which established that non-consideration of a relevant judicial decision or material evidence constitutes a mistake apparent from the record. The Rajasthan High Court's dismissal of the writ petition challenging the Commissioner's jurisdiction was a crucial piece of overlooked evidence.

5. Procedural Propriety of Rectification Applications Filed by the Department:
The Tribunal rejected the Appellants' argument that the rectification applications were a disguised attempt to review the final order. It held that the applications were legitimate, as they sought to correct a mistake that arose from the parties' erroneous statements during the hearing. The Tribunal also dismissed the contention that the Department's refund of pre-deposits in five appeals precluded it from filing rectification applications.

Conclusion:
The Tribunal concluded that the mistake in its final order, influenced by incorrect admissions from both parties, warranted rectification. It recalled the order dated 11 August 2017 and scheduled the appeals for a fresh hearing to address the jurisdictional issue and other merits comprehensively. The decision underscores the Tribunal's commitment to ensuring justice by rectifying errors apparent from the record, consistent with the principles established by higher judicial authorities.