2018 (9) TMI 173 - HC - Central Excise

Tribunal decision upheld on rectification application citing assessee's failure to raise contention, jurisdiction clarified

IWI CRYOGENIC VAPORIZATION SYSTEM (INDIA) PVT. LTD. Versus COMMISSIONER OF CGST AND CENTRAL EXCISE VADODARA-I

The High Court upheld the Tribunal's decision to dismiss the rectification application, citing the failure of the assessee to raise the relevant ... Rectification application - rejection of rectification application on the ground that the assessee had not raised such a contention before the Tribunal, or even before the lower authorities earlier and any exercise by the Tribunal to entertain such a contention to modify the order would amount to review- a power which the Tribunal does not possess. Held that:- In the present case, judgment of the Tribunal was passed on 29th June 2015. The Appeal was filed before the High Court sometime thereafter. Even after the High Court dismissed the appeal on 28th January 2016, it appears from the record that the rectification application was filed nearly six months later. Therefore, only on the question of limitation, rectification application could have been dismissed by the Tribunal; though Tribunal did not advert to this aspect of the matter. When the High Court dismissed the appeal of assessee in the earlier round of litigation, it merely kept liberty open to the assessee to approach the Tribunal by filing rectification application; if it was open for the appellant to do so. The High Court did not mandate the Tribunal to either entertain such an application or open an avenue; which otherwise may have been closed. Tax appeal dismissed. Issues:1. Challenge to Tribunal's rejection of rectification application2. Period of limitation for filing rectification applicationAnalysis:1. The appeal was filed challenging the Tribunal's rejection of the rectification application. The Tribunal dismissed the rectification application on the grounds that the assessee had not raised the contention before, and entertaining it would amount to review, a power the Tribunal does not possess. The High Court noted that the contention regarding reduced penalty under Section 78 of the Finance Act, 1994, was not raised before the Tribunal initially. The Court observed that the Tribunal's decision was based on the fact that the assessee had never raised such a contention at any stage of the proceedings. The Court held that the Tribunal did not commit any error in dismissing the rectification application, as the assessee failed to raise the specific ground earlier. Therefore, the Tax Appeal was dismissed.2. The High Court also examined the issue of the period of limitation for filing a rectification application. The Tribunal did not address this issue, but the Court noted that the rectification application was filed nearly six months after the High Court dismissed the appeal. The Court referred to Section 35C of the Central Excise Act, 1944, which provides a six-month period for rectification of orders by the Appellate Tribunal. The Court held that the rectification application could have been dismissed by the Tribunal on the grounds of limitation. Although the Tribunal did not consider this aspect, the Court found that the rectification application could have been dismissed solely based on the question of limitation. The Court emphasized that the Tribunal's decision not to entertain the rectification application was not erroneous, given the failure of the assessee to raise the specific contention earlier.In conclusion, the High Court upheld the Tribunal's decision to dismiss the rectification application, citing the failure of the assessee to raise the relevant contention previously and the potential limitation issue. The Court clarified the jurisdiction and powers of the Tribunal regarding rectification applications and affirmed the dismissal of the Tax Appeal.