Rectification of mistake cannot be reopened; company penalties were sustained on clubbing and undervaluation, while individual penalty failed for lack of complicity.

A further recall of an order passed on a rectification of mistake application was held impermissible, because there is no provision for rectifying a rectification order; the request to reopen that order was rejected. Penalties on the companies were sustained on the basis of accepted clubbing of clearances, mutuality of interest, common management, and admitted undervaluation, with one company's penalty reduced. The individual penalty under Rule 209A of the Central Excise Rules, 1944 was set aside because the record did not establish complicity in the alleged evasion or wrongful removal of goods.

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Issues: (i) whether an order passed on a rectification of mistake application could itself be recalled on a further request for rectification; (ii) whether penalties imposed on the companies were justified in view of clubbing of clearances and the admitted undervaluation; and (iii) whether penalty on the individual under Rule 209A of the Central Excise Rules, 1944 was sustainable.

Issue (i): whether an order passed on a rectification of mistake application could itself be recalled on a further request for rectification.

Analysis: A further recall of an order passed on a rectification of mistake application was found impermissible, as there is no provision enabling rectification of a rectification order. The request to reopen that order was therefore not entertainable.

Conclusion: The prayer to recall the order passed on the rectification of mistake application was rejected.

Issue (ii): whether penalties imposed on the companies were justified in view of clubbing of clearances and the admitted undervaluation.

Analysis: The finding that the two units had mutuality of interest, common work order and common management, and that their clearances were required to be clubbed, was not challenged. Since the duty demand had also been accepted, the imposition of penalty on the companies was held justified. Considering the amount of duty involved, the penalty on one company was reduced.

Conclusion: The penalty on one company was reduced to Rs. 5,000, while the penalty on the other company was upheld.

Issue (iii): whether penalty on the individual under Rule 209A of the Central Excise Rules, 1944 was sustainable.

Analysis: The record did not contain valid evidence establishing the individual's complicity in the alleged evasion or wrongful removal of goods. In the absence of such evidence, the statutory basis for penalty was not made out.

Conclusion: The penalty on the individual was set aside.

Final Conclusion: The decision sustained company-level penal consequences arising from the accepted clubbing finding, while granting relief by reducing one penalty and deleting the individual penalty, and it refused to reopen the rectification-based order.

Ratio Decidendi: A further rectification is not maintainable against an order already passed on rectification, and penalty under Rule 209A requires evidence of conscious involvement or complicity in the offending conduct.

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