Mistake apparent from the record justified rectification where a material precedent on capital goods was ignored.

Non-consideration of a specifically raised plea based on a Larger Bench ruling on the scope of capital goods under Rule 57Q was treated as a mistake apparent from the record. The assessee had argued that the disputed items qualified as capital goods even before 16-3-1995, but the earlier final order dealt only with the prospective effect of the amendment inserting clauses (d) and (e) and did not address the binding precedent. That omission justified rectification under Section 35C(2) of the Central Excise Act, 1944, recall of the earlier order, and restoration of the appeal to its original number.

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Issues: Whether the non-consideration of the assessee's plea based on the Larger Bench decision on the scope of capital goods under Rule 57Q constituted a mistake apparent from the record warranting rectification under Section 35C(2) of the Central Excise Act, 1944, and recall of the earlier order.

Analysis: The assessee had specifically pleaded that the disputed items were covered by the definition of capital goods even prior to 16-3-1995, and that the Larger Bench ruling supported admissibility of Modvat credit. The record showed that this plea had been raised, but the earlier final order rejected the claim only on the footing that the amendment by Notification No. 11/1995-C.E. (N.T.) inserting clauses (d) and (e) was prospective, without considering the effect of the Larger Bench ruling. Failure to consider a material plea already on record amounted to a mistake apparent from the record.

Conclusion: The rectification application was maintainable and the earlier final order was recalled; the appeal was restored to its original number.

Final Conclusion: The assessee succeeded in obtaining rectification of the earlier order on the ground of an apparent error arising from non-consideration of a material legal plea, and the matter stood restored for further consideration.

Ratio Decidendi: Omission to consider a relevant and specifically raised legal contention supported by binding precedent constitutes a mistake apparent from the record, justifying rectification and recall of the order under the applicable rectification provision.

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