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TMI Blog2008 (6) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... dent. [Order per : Jyoti Balasundaram, Vice-President]. - The above application for rectification of mistake in Final Order Nos. A/2105 to 2108/WZB/06 dt. 1-11-06 [2007 (208) E.L.T. 38 (Tri.-Mum.)] are taken up for hearing pursuant to the directions of the Hon'ble Gujarat High Court's order dated 19-3-2008 Special Civil Application No. 4524 and Civil Application No. 3401 of 2008. 2. The ld. SDR raises a preliminary objection that the Tribunal cannot pass any order on the ROM application filed on 4-12-06 for the reason that application for rectification of mistake is required to be disposed of within a period of six months from the date of the order sought to be rectified, as per Sec. 35C(2) of the Central Excise Act, 1944, as held by the Hon'ble Karnataka High Court in CCE, Bangalore v. Denso Kirloskar industries [2008 (224) E.L.T. 207 (Kar.)]. 3. On the other hand, it is the contention of the ld. counsel for the applicants that the above judgment is per incuriam as it has not considered the earlier binding judgments on the very same issue. 4. We have heard both sides. Sec. 35C(2) reads as under :- "(2) The Appellate Tribunal may, at any time within six mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... general inconvenience or injustice to persons who have no control over those entrusted with the duty, and at the same time would not pronote the main object of the Legislature, such provisions should be construed as being directory only and not imperative. It is true that the act which the Privy Council was considering was an act of a different kind, but it spears to us that the principle laid down is none the less applicable here, because the object of the Legislature is to provide that questions of law arising out of the order of the Tribunal shall be further considered by the High Court, if the either of the parties so desires and it is in furtherance of that object that a duty has been laid on the Tribunal to place such questions before the High Court. The Tribunal is a judicial body and over its acting the parties have no control. In those circumstances, to construe the time limit for the submission of the case as mandatory might in a case be to deprive a part of his right to have a question of law considered by the High Court which the Act intends to be so considered and in view of that possibility, the provision should be construed as only directly so that a party may not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion which he can claim as of right under the Section and that the prescription of time for the decision of an application for rectification under Sec. 45 is directory in nature and not mandatory. The relevant portion of the judgment is reproduced herein below:- "It is stated in Maxwell on Interpretation of Statutes (11th edition) at page 364: "….But when a public duty is imposed and the statute requires that it shall be performed in a certain manner, or within a certain time, or under other specified conditions, such prescriptions may well be regarded as intended to be directory only in cases when injustice or inconvenience to others who have no control over those exercising the duty would result if such requirements were essential and. imperative." See also 82 Corpus juris Secundum 876 where the following statement appears: "Where a statute directs the doing of a thing within a certain time without any negative words restraining the doing of it afterwards, generally the provision as to time is directory and not a limitation of authority, and, in such case, where no injury appears to have resulted, the fact that the act was performed after the time limited will not render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke any reference at any time and the assessees might find their income-tax affairs consigned to a state of complete chaos. I do not foresee that such a state of things will or can result, if the direction contained in section 66(1) is construed as directory. The true reason why a provision of that character ought not to be construed as mandatory was given by us in our previous decision. Broadly stated, the reason is, as was stated by the Privy Council in the case of Montreal Street Rail Co. v. Normandin - [1917] A.C. 170, to which we referred, that where the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of that duty would work serious general inconvenience or injustice to persons who had no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, such provisions should be construed as being directory only and not imperative. Mr. Ginwala contended that it need not be held that parties were absolutely at the mercy of the Tribunal and therefore if they were made to suffer for the neglect or default of the Tribunal, undeserved pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be construed as laying down that the observance of the time-limit for making a reference is also mandatory and that a default in that regard shall make the reference incompetent, although the consequence may be to make a party suffer for the fault of the Tribunal." 8. The same view has been expressed by the Hon'ble Madras High Court in Kadirvel Nadar v. State of Madras [1962 (46) ITR 251 (Mad.) in the context of Sec. 34(2) of the Income tax Act (reproduced below):- "Section 34 of the Act provides that the Commissioner may exercise the revisional power either on his own motion or an application by the assessee. Sub-section (2) of section 31, as it stood in the year of assessment, 1956-57, provides that the Commissioner shall not revise any order of the subordinate authority if the order had been made more than one year previously. This provision has now been amended and instead of one year, a period of three years has been fixed. Section 34(2)(c) enacts a period of limitation and it applies both to the Commissioner initiating proceedings on his own motion and to the assessee applying for revision. It cannot be said that after the lapse of the period of one year, as it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly in the nature of a period of limitation. When the assessee applies within the period prescribed, the expiry of the period does not render the Commissioner functus officio. But the provisions of the Agricultural Income-tax Act do not make a distinction between cases where the Commissioner exercise his powers suo motu and cases where he exercises such powers on the application of the assessee. We are of opinion that section 34 of the Agricultural Income-tax Act has fixed the period of one year, only as a period of limitation which applies both to the Commissioner as well as to the assessee. So long as the proceedings have commenced within the period fixed, the power of the Commissioner can be exercised at any time thereafter, and it is not necessary that the power should be exercised within the period fixed. The right of the assessee to obtain relief by applying for revision should not depend on the hazard of the revising authority disposing of the matter within a particular period and cannot be defeated by the failure of the authority to discharge the statutory functions."- (emphasis supplied) and the full Bench of the Madras High Court approved the above view as seen fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is given to section 34(2)(c) of the Agricultural Income-tax Act, the section will be unworkable and work hardship on the assessee who have to be at the mercy of the revisional authority for an effective disposal of their revision petitions, for the revisional authority can always defeat the assessee's remedy of revision by postponing its disposal beyond three years. It is well established that in interpreting a section of a taxing Act which deals merely with the machinery of assessment and does not impose a charge on the subject, that construction should be preferred which makes the machinery workable - ut res magis valeat quam pereat. It is also well established that a construction so unreasonable ought not to be preferred when another construction is open and that the interpretation to be placed on the words of the section must be one which harmonises with the context and promotes in the fullest manner the policy and object of the legislature Therefore, without giving proper effect to the scheme of the Act we cannot construe section 34(2)(c) in the context of the provisions of the Income-tax Act which provides for a different scheme of revision. Further, the word "revise" i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, within 60 days of the date of that order, passed by it under the Advocates Act. The Apex Court held that the application filed by the petitioner for invoking review jurisdiction was well within limitation and that the jurisdiction to review was not lost by the Bar Council of India merely by lapse of 60 days from the date of the order sought to be reviewed. 10. In the light of the Apex Court decision in CIT. West Bengal, Calcutta v. Raja Benoy Kumar Sahas Roy [1957 (32) ITR 466 (S.C.)] affirming the Calcutta High Court decision in 24 ITR 70 and D. Saibaba v. Bar Council of India (supra) and the decision of the Full Bench of the Madras High Court in Kadirvel Nadar (supra), we hold that the Tribunal has jurisdiction to consider an application for rectification of mistake after expiry of six months from the date of final order, provided that such applications are filed within six months from the date of receipt of the final order. In today's case, the applications have been filed within the above mentioned period and are hence maintainable. The preliminary objection of the Revenue is accordingly overruled. 11. We now take up the applications for decision. 12. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the duty on Atenolol and Famotidine exported, the ld. D.R. submits that these products were manufactured by using imported as well as indigenous material and in the absence of separate records maintained by the assessee, it cannot be established that the goods were manufactured wholly out of indigenous raw material and therefore, the benefit of concessional rate of duty under Notification No. 8/97-CE dated 1-3-1997 is not available and further there is no whisper in the appeal that any quantity of Atenolol and Famotidine had been exported and that therefore, no demand could be confirmed on the exported quantity. 14. We find that the plea of non-imposability of penalty on the demand of anti-dumping duty, CVD, SAD was raised in the synopsis filed by the company and are reproduced in the order recorded by the ld. Member (Technical). We see merit in the submission of the assessee. At the material time Sec. 9A(8) of the Customs Tariff Act, 1975 borrowed the provisions of the Customs Act, 1962 and rules and regulations made thereunder, relating to non-levy, short-levy, refunds for the purpose of levy of duty. Section 3(6) of the Customs Tariff Act under which CVD is levied provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Apex Court judgment in M.K. Venkatachalam, Income Tax Officer another v. Bombay Dyeing Mfg. Co. Ltd. [1958 (34) ITR 143 (S.C)] and Karamchand Premchand P. Ltd. v. Commissioner of Income Tax [1993 (200) ITR 268 (SC)] and the Larger Bench of the Tribunal in Hindustan Lever Ltd v. CCE, Mumbai [2006 (202) E.L.T. 177 (Tri-LB) = 2008 (10) S.T.R. 91 (Tri. LB)] and in MRF Ltd. v. CCE, Goa [2007 - TIOL-1254] and we accordingly set aside the levy of interest. We also set aside the interest levied and penalty imposed for non-payment of surcharge of customs leviable under Sec. 90 of the Finance Act, 2000 since Section 90(4) did not borrow the provisions of the Customs Act, 1962 relating to the charging of interest or imposition of penalty. 17. As regards the plea that the quantification of duty on Ascorbic Acid TMBA is incorrect for the reason that the amount includes Rs. 1,21,80,032/- paid on these two items on clearance to DTA, we are of the view that no error arises as the above amount confirmed by the Commissioner has been upheld as he was not satisfied regarding the above claim of payment, in the absence of payment particulars furnished by the applicants. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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