Binding precedent on commodity classification required rectification, with margarine taxed as edible oil at the lower rate.

Failure to apply a binding higher-court ruling on commodity classification constituted a mistake apparent from the record, justifying rectification of the earlier appellate order. The Tribunal treated the omission to follow the controlling decision on margarine as an error capable of correction in rectification proceedings. Applying that ruling, margarine had to be classified as edible oil under the relevant schedule and taxed at 5.5%, not 12.5%. The rectification application therefore succeeded and the earlier order was modified to conform to the binding precedent.

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Issues: (i) Whether there was a mistake apparent from the record warranting rectification of the earlier appellate order. (ii) Whether margarine was required to be treated as edible oil taxable at 5.5% in light of the binding High Court decision.

Issue (i): Whether there was a mistake apparent from the record warranting rectification of the earlier appellate order.

Analysis: The rectification application was founded on the contention that the earlier order had not applied the High Court ruling which had already determined the tax treatment of margarine. The omission to give effect to a binding decision on the very classification and rate of tax was treated as an error apparent on the record.

Conclusion: The issue was answered in the affirmative.

Issue (ii): Whether margarine was required to be treated as edible oil taxable at 5.5% in light of the binding High Court decision.

Analysis: The High Court had held that margarine falls within edible oil under Entry 31 of the Third Schedule and attracts tax at 5.5%. Once that ruling was brought to notice, the Tribunal was required to apply it to the relevant tax period and correct the earlier view that had sustained taxation at 12.5%.

Conclusion: Margarine was held taxable at 5.5% as edible oil.

Final Conclusion: The rectification application succeeded and the earlier appellate order was modified to align the tax classification of margarine with the binding High Court ruling.

Ratio Decidendi: Failure to apply a binding higher-court ruling directly governing the tax classification and rate of a commodity constitutes a mistake apparent from the record and is liable to be rectified.

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