Rectification application allowed beyond six months under Section 35C(2) when computed from receipt date

CESTAT NEW DELHI allowed a rectification of mistake (ROM) application filed beyond six months from the final order. The Tribunal initially rejected the application citing Section 35C(2) of Central Excise Act's six-month limitation. However, relying on Gujarat HC decisions, CESTAT held that the six-month period should be computed from the date of receipt of the order by the appellant, not from its passing. The Tribunal found errors apparent on record as vital submissions regarding Section 9D were not considered in the original adjudication, which relied primarily on third-party evidence and proprietor's admission regarding clandestine removal.

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Issues Involved:
1. Failure to consider material evidence.
2. Allegation of clandestine removal based on transactions with M/s Hind Metal Industries.
3. Admission of statement by Shri Alok Aggarwal.
4. Reliance on retracted statements.
5. Jurisdiction of the Tribunal to rectify mistakes apparent on the record.
6. Calculation of the limitation period for filing ROM.

Detailed Analysis:

1. Failure to Consider Material Evidence:
The appellant argued that the Tribunal, in its Final Order dated 20.06.2018, failed to consider the material evidence on record and upheld the order-in-original dated 19.10.2015 in a routine manner. The appellant contended that this oversight constituted a significant error that warranted rectification.

2. Allegation of Clandestine Removal Based on Transactions with M/s Hind Metal Industries:
The appellant's appeal was rejected on the sole ground of admitting transactions with M/s Hind Metal Industries, which led to the booking of a case of clandestine removal against the appellant. The appellant highlighted that the Tribunal had allowed the appeal of M/s Hind Metal Industries (Final Order No. 51339/2018 dated 12.04.2018), setting aside the duty demand and penalty due to the failure to satisfactorily establish clandestine manufacture and clearance.

3. Admission of Statement by Shri Alok Aggarwal:
The appellant contended that the Tribunal failed to consider their arguments regarding the admission of the statement by Shri Alok Aggarwal. The appellant cited several precedents, including Jindal Drugs Pvt. Ltd. Vs. Union of India and CCE, Delhi-I Vs. Kuber Tobacco India Ltd., arguing that the Tribunal did not appreciate the settled law regarding the admissibility of such statements.

4. Reliance on Retracted Statements:
The appellant argued that the Tribunal erred by relying solely on the statement of Shri Alok Aggarwal, which had been retracted at the earliest possible opportunity before the Secretary to the Government of India, New Delhi. The appellant emphasized that the Tribunal was duty-bound to consider various precedent judgments on the subject matter of clandestine removal, which were raised during the appeal and personal hearing.

5. Jurisdiction of the Tribunal to Rectify Mistakes Apparent on the Record:
The appellant relied on several judicial decisions, including CCE, Mumbai-III Vs. NTB International Pvt. Ltd. and CST Bangalore Vs. Yokogawa Blue Star Ltd., to argue that the Tribunal has the jurisdiction to rectify mistakes apparent on the record under Section 35C(2) of the Central Excise Act. The appellant cited the decision of the Hon’ble High Court of Madras in Roots Multiclean Ltd. Vs. CESTAT, Chennai, which held that the Tribunal could rectify mistakes within six months from the passing of the order.

6. Calculation of the Limitation Period for Filing ROM:
The appellant argued that the ROM was filed within six months from the receipt of the Tribunal’s order, as per the decisions of the Hon’ble Gujarat High Court in Liladhar T. Khustani and Allied Fibres Ltd. The Tribunal considered these arguments and concluded that the relevant date for computing the six-month limitation period is from the date of receipt of the order by the appellant. The Tribunal overruled the preliminary objection raised by the Departmental Representative regarding the maintainability of the ROM application on the aspect of limitation.

Conclusion:
The Tribunal concluded that the errors pointed out in the impugned order were apparent on the record. The Tribunal allowed the ROM and directed that the appeal be heard afresh, considering all the material evidence and arguments presented by the appellant. The Registry was instructed to take the necessary steps to facilitate the rehearing of the appeal.

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