2018 (8) TMI 1387 - AT - Central Excise

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 ... Refund of amounts paid on behalf of manufacturer-buyers - cenvat credit entitlement of manufacturer-buyers - rectification of mistake apparent on the record - power to modify orders under Section 35C(2) of the Central Excise Act, 1944Refund of amounts paid on behalf of manufacturer-buyers - treatment of payments made by appellant on behalf of others for refund purposes - cenvat credit entitlement of manufacturer-buyers - Whether amounts deposited by the appellant from its own account on behalf of manufacturer-buyers are refundable to the appellant in view of the entitlement of manufacturer-buyers to cenvat credit. - HELD THAT: - The Tribunal found on the record that although earlier orders treated the payments as having been made by the manufacturer-buyers, the amounts were in fact deposited by the appellant from its own account pursuant to the direction of the Hon'ble Additional Sessions Judge, New Delhi, which required deposit in the name of manufacturer-buyers but allowed the applicants to deposit the sums through the applicants and to seek refund in accordance with law. The Tribunal held that manufacturer-buyers are entitled to take cenvat credit and, having regard to the direction permitting deposit through the applicants and the fact that the appellant paid the amounts from its own account, the sums so paid can be refunded to the appellant if claimed. The Tribunal accordingly modified its earlier paragraphs to record that cenvat credit cannot be denied to manufacturer-buyers and that the amount paid by the appellant during the investigation can be refunded if asked for. [Paras 6, 7]Amounts paid by the appellant from its own account on behalf of manufacturer-buyers are refundable to the appellant if claimed, and manufacturer-buyers are entitled to cenvat credit; the earlier record to the contrary is modified.Rectification of mistake apparent on the record - power to modify orders under Section 35C(2) of the Central Excise Act, 1944 - Whether the Tribunal could modify its earlier order to correct the apparent mistake that the payments were made by manufacturer-buyers when in fact they were paid by the appellant. - HELD THAT: - The Tribunal examined the scope of its corrective power and held that Section 35C(2) of the Central Excise Act, 1944 empowers the Tribunal to modify an order to rectify a mistake apparent on the face of the record. The Tribunal concluded that the earlier order had overlooked the fact that the appellant had paid the amounts from its own account; this oversight constituted a mistake apparent on the record warranting rectification rather than a review. Consequently, the Tribunal exercised its power under Section 35C(2) to modify paragraphs 16 and 17(c) of the order dated 20.04.2015 to reflect the correct position. [Paras 7]The Tribunal may and did modify its earlier order under Section 35C(2) to rectify the apparent mistake that the payments were made by manufacturer-buyers when they were in fact paid by the appellant.Final Conclusion: The miscellaneous applications for rectification are allowed: the Tribunal's order of 20.04.2015 is modified to record that manufacturer-buyers are entitled to cenvat credit and that amounts paid by the appellant on behalf of manufacturer-buyers can be refunded if claimed; the modification was made by exercising the Tribunal's power to rectify a mistake apparent on the record under Section 35C(2). Issues: Rectification of mistake in the order passed by the TribunalAnalysis: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.