Tribunal rectifies order, grants cenvat credit to manufacturer-buyers, refunds penalties

The Tribunal granted the rectification of a mistake in its order, allowing cenvat credit to manufacturer-buyers and rendering the demand of duty with interest unsustainable. Penalties on manufacturer-buyers were deemed not imposable, and the amount paid by M/s AMC's during the investigation could be refunded upon request. The Tribunal modified the order under Section 35C(2) of the Central Excise Act, 1944, acknowledging that the appellant had paid the disputed amount from their own account as directed by the court, entitling the manufacturer-buyers to cenvat credit.

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Issues: Rectification of mistake in the order passed by the Tribunal

Analysis:
The applicant filed applications for rectification of mistake in the order passed by the Tribunal on 20.04.2015. The dispute arose from the recording in the order that certain amounts paid by M/s AMCo & AMCorpn. during the investigation were not refundable. The applicant contended that they had paid the disputed amount from their own account on behalf of various manufacturer/buyers, as directed by the Hon'ble Additional Session Judge. The applicant argued that since cenvat credit was available to the manufacturer-buyer, the amount should be refundable to them. The AR opposed this, stating that the duty had been paid on behalf of the manufacturer and therefore was not refundable. The Tribunal found that the amount had indeed been paid by the applicant from their own account, as per the direction of the Hon'ble Additional Session Judge, and that the manufacturer-buyer was entitled to cenvat credit. The Tribunal held that the order needed modification to rectify the mistake apparent on record.

The Tribunal noted that the provisions of Section 35C(2) of the Central Excise Act, 1944 empowered them to modify the order if a mistake was apparent from the record. In this case, it was evident that the amount paid by the appellant from their own account had been overlooked while passing the order. Therefore, the Tribunal concluded that the mistake needed rectification, and the order required modification. Consequently, para 16 of the order was modified to allow cenvat credit to manufacturer buyers and to render the demand of duty along with interest unsustainable. Penalties on manufacturer buyers were deemed not imposable. Para 17(c) was also amended to state that the amount paid by M/s AMC's during the investigation could be refunded if requested. The miscellaneous applications filed by the applicants were thus disposed of accordingly.

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