Binding Supreme Court precedent and error apparent justified recall of the order in the MODVAT credit dispute.

Non-consideration of a binding Supreme Court decision on MODVAT credit for lubricants used in mining machinery constituted an error apparent on the face of the record. The larger-bench view applied was that omission to follow an operative Apex Court ruling at final disposal renders the order per incuriam and amenable to recall. On that basis, the earlier final order was recalled, the recall application was allowed to that extent, and the matter was reopened for fresh disposal.

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Issues: Whether the final order was liable to be recalled for non-consideration of a binding Supreme Court decision on admissibility of MODVAT credit on lubricants used in mining machinery.

Analysis: The application sought recall on the ground that a later Supreme Court ruling had overruled the earlier view followed in the final order. The failure to notice and apply the binding Supreme Court decision constituted an error apparent on the face of the record. The prevailing larger bench view recognised that omission to consider a binding Apex Court judgment at the time of final disposal renders the order per incuriam and amenable to recall.

Conclusion: The final order was held to be erroneous and was recalled. The recall application was allowed to that extent.

Final Conclusion: The matter was reopened for passing of a fresh final order, and the earlier disposal ceased to operate.

Ratio Decidendi: Non-consideration of a binding Supreme Court judgment at the time of final disposal constitutes an error apparent on the face of the record and justifies recall of the order as per incuriam.

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