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TMI Blog1984 (12) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise (Appeals), Bombay, in which he had upheld the Order No. CL. No. 1E/2/78, dated 26-6-1978/18-10-1979 of the Assistant Collector of Central Excise, Division III, Ahmedabad, holding that the "Wet Dextrose" produced by the applicants was excisable and classifiable under Item 1E of the Central Excise Tariff Schedule. On the constitution of the Tribunal the revision application stood transferred under Section 35P Central Excises and Salt Act. 3. The matter was heard by Special Bench-D of the Tribunal and that Bench, by its Order No. 180/84-D, dated 2-4-1984, rejected the appeal. 4. Thereafter the applicants filed a Miscellaneous application under Section 35C(2) of the Central Excises and Salt Act which was titled as an application for review of the Order No. 180/84-D, dated 2-4-1984 passed by the Customs, Excise and Gold (Control) Appellate Tribunal. The application was heard as an application in terms of Section 35C(2) by the same Bench which had passed the order dated 2-4-1984. By its Order No. Miscellaneous 104/84-D, dated 23-8-1984 and for the reasons given therein, the Bench rejected the application. 5. It is with reference to the above order dated 23-8-1984 rejecting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omething which has to be established by long process of reasoning or arguments. A decision on a debatable point of law cannot be a mistake apparent from the record." Shri Dholakia argued that there was only one basic point for determination, namely whether the "Wet Dextrose" was marketable. Therefore, according to him, when the Tribunal referred to "debatable points" it must be held to have had in mind the question of marketability which already stood settled. 9. Shri Dholakia thereafter referred to the Tribunal's Order dated 2-4-1984. In para 10 of that order the Tribunal had observed "the contention of the learned consultant of the appellants that excise duty can be levied only on final finished products capable of being marketed cannot be accepted as correct. Even products which come at intermediate stage and are used for further manufacture are liable to excise duty". The said para 10 went on to refer to the judgment of the Hon'ble Allahabad High Court in the case of Union of India and Others v. Union Carbide India Limited (1978 E.L.T. J 1), and quoted the observations of their Lordships that a thing would nevertheless be goods even if it does not have a general market, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able and were classifiable under a particular Item No. IE of the Central Excise Tariff Schedule, they prima facie appeared to be hit by the exclusion clause, in view of this, Shri Dholakia was asked how the application could be considered as maintainable in terms of Section 35G. On this Shri Dholakia submitted that there was a distinction between a question of "leviability" and a question of "rate of duty". 13. The Bench drew Shri Dholakia's attention to the decisions of the Tribunal in the case of Union Carbide India Limited, Calcutta v. Collector of Customs, Calcutta, reported in 1984 (18) E.L.T. 449 = 1984 E.C.R. 1634, wherein the scheme of the Act had been analysed and it has been noted that a clear distinction had been made between cases involving a determination of rates of duty or value for purposes of assessment on the one hand and those which did not involve any of the aforesaid issues on the other. The former category of cases had been reserved for Special Benches of three Members or more, whereas the latter were heard by two-Member Regional Benches. Shri Dholakia's argument amounted to saying that where a dispute was as to whether certain goods should be assessed at a h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not as if they could get relief only by means of a reference application. 15. Shri Raghavan Iyer then argued on the question of maintainability of the application in terms of Section 35G, Central Excises and Salt Act. He referred to the argument of Shri Dholakia that the point at issue was not one regarding a rate of duty, but one whether the goods were at all excisable and liable to duty. Shri Raghavan Iyer submitted that the exclusion under Section 35G was of an order relating among other things to the determination of any question having a relation to the rate of duty of excise. He submitted that the question whether an article was excisable and liable to duty clearly had a relation to the rate of duty of excise; the excisability of the goods was a necessary pre-condition for applying a particular rate of duty. The imposition of a levy and the collection of duty at a particular rate were clearly connected matters. Therefore, the terms of the exclusion were wide enough to cover also an argument that the goods were not liable to duty at all. 16. Shri Raghavan Iyer referred to the argument of Shri Dholakia that the distinction in the jurisdictions of Special Benches and Regional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrors or for a reference to the High Court. 20. Thereafter, Shri Dholakia was given the opportunity to reply to Shri Raghavan Iyer. At this stage, and with reference to the maintainability of the present application under Section 35G, the Bench pointed out to Shri Dholakia that an application in circumstances such as the present would necessarily have to be considered in the light of the first decision (the order dated 2-4-1984 in this case). If Shri Dholakia's contentions were correct, it would appear to follow that a party, after receiving an order unfavourable to him, could sleep over the matter for nearly four years, then file an application under Section 35C(2), and if it was rejected, file a reference application which would ostensibly arise from the order on the rectification application but would in fact be directed against the original order thus defeating the limitation provision in Section 35G in regard to reference applications. Shri Dholakia's reply was that the failure to file a reference application against the original order would not debar a party from filing a rectification application subsequently, and also a reference application based on a rectification applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sentence as being contrary to the law laid down by the Supreme Court, was not justified. What was sought to be conveyed by this paragraph was that the test of general marketability was not sound, particularly in the case of a monopoly product, but the need for marketability as such was not ignored. Shri Dholakia did not wish to make a further reply. 25. We have given our careful consideration to the arguments advanced by Shri Dholakia in support of his application. As far as we are aware, this is the first occasion on which such an application has been presented to the Tribunal, seeking a reference from an order on an application for rectification of an order on an appeal passed by a Special Bench. In dealing with this matter, we have to take into account the scope of the orders which can be passed under three different provisions of the Central Excises and Salt Act, meant for three different situations, namely Section 35C (1), empowering the Tribunal to pass on an appeal such orders as it thinks fit; Section 35C (2), empowering the Tribunal to rectify a mistake apparent from the record on an order passed under Section 35C (1); and Section 35G, empowering the Tribunal to state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Limited v. Collector of Customs, Calcutta (1984 ECR 1634). In that order the Tribunal had examined in great detail the scope of Section 130 Customs Act, which is in pari materia with Section 35 of Central Excises and Salt Act. As a result the Tribunal had construed the words "an order relating to" in Section 130(1) Customs Act to mean "an order standing in some relation to" or "an order concerning or pertaining to" the determination of any question relating to rate of duty of customs or to the value of goods for assessment and not "an order whose dominant purpose or theme is the determination" of the aforesaid issues. This decision is equally applicable to the parallel provisions of Section 35G Central Excises and Salt Act. If the order passed under Section 35C(1) is hit by the exclusion clause in Section 35G(1), then no reference to the High Court would lie from such an order; equally, where an order under Section 35C(2) has a relation to the ratio of the decision in an order passed under Section 35C(1) (as in the present case) such order would be equally hit by the exclusion clause and no reference under Section 35G would lie against such an order passed under Section 35C(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty. This could perhaps he argued ; as a proposition in abstract logic, but again having regard to the scheme of the provisions relating to the Tribunal, it would lead to illogical and anomalous results. If this were the correct legal position, a case where one had to choose between a 10% rate of duty under the tariff and a "nil" rate of duty under an exemption notification would attract the provisions relating to a Special Bench and an appeal direct to the Supreme Court, while a case where one had to choose between a 10% rate of duty and non-leviability of duty would not. We do not think that we would be justified in adopting such an anomalous interpretation, when there is available another interpretation which is not only plausible but also confers on the assessee the benefit of consideration by a Special Bench and an appeal direct to the highest Court in the land. 32. Apart from our conclusion in para 30 above, there is the further point made by Shri Raghavan Iyer, namely that the question of excisability is itself a question having a relation to the rate of duty of excise. The question of excisability is clearly relevant and related to the application of a particular rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . When he was asked to point out where exactly this observation had been made in that order, he referred to the above observation and sought to argue that this amounted to saying that the issue of marketability was a debatable one. He further supported his argument by referring to para 10 of the order dated 2-4-1984. 37. As pointed out to Shri Dholakia, there is no observation in the order dated 23-8-1984 that the issue of marketability is a debatable one. What was said was that the entire case of the applicants in the application seeking rectification was based on debatable points. This observation was made in the context of deciding whether the order dated 2-4-1984 contained a mistake apparent from the record, in which case only Section 35C(2) could be invoked. What Shri Dholakia sought to do was to impute to the Tribunal with reference to its order dated 23-8-1984 an observation which it had not made in that order, and then assail the above supposed observation and make it the basis of a reference to the High Court. Even this he could do only by taking us back to observations contained in the order dated 2-4-1984. Thus the reference application is in effect and in substance dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 2-4-1984) and we accordingly reject this application. Questions of law arising out of the Order of the Appellate Tribunal (as set out in Annexure-B to Reference Application dated 30-10-1984). 1. What is the true meaning and scope of the words "Any mistake apparent from records" appearing in Sec. 35C(2) of the Act ? 2. Whether refusal to rectify the mistake or error apparent in the face of record viz. in not following the tests of marketability for attracting the levy of excise, in light of Hon'ble Supreme Court's judgment in Delhi Cloth Mills case (AIR 1963 S.C.), and South Bihar Sugar Mills case (AIR 1968 S.C.), will make the decision of Tribunal dated 23-8-1984, bad in law and patently illegal or not ? 3. Whether not following the well settled tests of marketability, a law laid down by the Supreme Court, will not be error apparent from the records ? 4. The test of marketability to attract the levy of excise, which is the law laid down by the Supreme Court, in Delhi Cloth and General Mills case and South Bihar Sugar Mills case, referred to above and followed by the various High Courts, can be said to be the debatable point of law ? 5. Did the Tribunal not err in law for no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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