2019 (4) TMI 750 - AT - Central Excise

Rectification granted for Exemption Notification benefit to non-virgin polychips.

M/s. SRF Limited Versus Commissioner of Central Excise-Chennai-i

The Tribunal allowed the application for rectification, amending the Final Order to grant the benefit of the Exemption Notification dated 6 September 1995 ... Rectification of mistake - Jurisdiction - power on the Appellate Tribunal to rectify any mistake apparent from the record - Section 35 C (2) of the Central Excise Act, 1944 - error apparent from the record - Held that:- A bare perusal of the aforesaid sub-section (2) of Section 35C(2) of the Act indicates that the Appellate Tribunal may, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1). Sub-section (1) provides that the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision for a fresh adjudication. What is, therefore, necessary for a mistake to be rectified is that it must be apparent from the record. Both ‘mistake and ‘apparent’ have been explained by the Supreme Court in Deva Metal Powders (P) Ltd. vs Commissioner, Trade Tax (UP), [2007 (12) TMI 221 - SUPREME COURT OF INDIA]. The Supreme Court pointed out that ‘mistake’ means to take or understand wrongly or inaccurately or to make an error in interpreting and ‘apparent’ means visible; capable of being seen; obvious; plain. It has, therefore, been observed by the Supreme Court that a mistake which can be rectified is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. Whether non-consideration of a judgment relevant to the issue for determination which was also placed before Bench of the Tribunal, can be said to be a mistake apparent from the record so as to be rectified under Section 35C(2) of the Act? - Held that:- This issue was examined by the Supreme Court in Asstt. Commr., Income Tax, Rajkot vs Saurashtra Kutch Stock Exchange Ltd., [2008 (9) TMI 11 - SUPREME COURT]. The Supreme Court held that non-consideration of a decision of a High Court or the Supreme Court can be said to be a “mistake apparent from the record”, which mistake can be rectified. It was pointed out that the error apparent from the record should be so manifest and clear that no Court would permit it to remain on record. It should be pertinent and self-evident and not require any elaborate discussion of evidence or argument. It was also observed that rectification of an order stems from the fundamental principle that justice is above all and it is to be exercised to remove the error and to disturb the finality. Thus, the mistake that had crept in the Final Order by granting benefit of the Exemption of the Notification from 6 September, 1995 instead of from 1 March, 1994 needs to be rectified - ROM application allowed. Issues Involved:1. Whether the non-consideration of a relevant judgment amounts to a mistake apparent from the record under Section 35C(2) of the Central Excise Act, 1944.2. Whether the benefit of the Exemption Notification dated 6 September 1995 should be granted from 1 March 1994 instead of 6 September 1995.Issue-wise Detailed Analysis:1. Non-consideration of a Relevant Judgment as a Mistake Apparent from the Record:The appellant filed an application under Section 35C(2) of the Central Excise Act, 1944, seeking rectification of an alleged mistake in the Tribunal's Final Order dated 20 July 2017. The appellant argued that the Tribunal failed to consider a relevant judgment (Commissioner of Central Excise, Trichy Vs. Supreme Industries Ltd.) that was presented during the appeal hearing. The appellant relied on the Supreme Court's decision in Honda SIEL Power Products Ltd. Vs. Commissioner of Income Tax, Delhi, which held that non-consideration of a relevant judgment constitutes a mistake apparent from the record.The Tribunal discussed the definitions of 'mistake' and 'apparent' as explained by the Supreme Court in Deva Metal Powders (P) Ltd. vs Commissioner, Trade Tax (UP), emphasizing that a mistake must be patent and obvious, not requiring elaborate argument or investigation. The Tribunal referred to the Supreme Court's decision in Asstt. Commr., Income Tax, Rajkot vs Saurashtra Kutch Stock Exchange Ltd., which held that non-consideration of a High Court or Supreme Court decision is a mistake apparent from the record, rectifiable under Section 35C(2).The Tribunal further cited Honda Siel Power Products Ltd. vs Commissioner of Income Tax, Delhi, which reinforced that rectification is necessary to prevent prejudice caused by the Tribunal's oversight of relevant judgments. The Tribunal concluded that the non-consideration of the Supreme Industries Ltd. judgment, which was placed before it during the appeal hearing, constituted a mistake apparent from the record.2. Effective Date of the Exemption Notification:The appellant contended that the benefit of the Exemption Notification dated 6 September 1995 should be granted from 1 March 1994, based on the Supreme Industries Ltd. decision. The Tribunal acknowledged that the Supreme Industries Ltd. judgment was placed before it during the appeal hearing but was not considered in the Final Order. The Supreme Industries Ltd. case concluded that the Exemption Notification should be treated as clarificatory and effective from 1 March 1994, filling a void in the exemption period.The Tribunal noted that the Division Bench, in its Final Order, recognized the issue of whether the exemption applied to non-virgin polychips and granted the benefit from 6 September 1995. However, the appellant argued that the exemption should apply from 1 March 1994, consistent with the Supreme Industries Ltd. decision. The Tribunal agreed that the failure to consider this relevant judgment was a mistake apparent from the record.The Tribunal cited the Supreme Court's decision in Honda Siel Power Products Ltd., emphasizing the importance of the 'Rule of Precedent' and the need to rectify mistakes that cause prejudice due to oversight. The Tribunal concluded that the mistake in granting the exemption from 6 September 1995 instead of 1 March 1994 needed rectification.Conclusion:The Tribunal allowed the application for rectification, directing that the Final Order be amended to reflect that the benefit of the Exemption Notification dated 6 September 1995 to non-virgin polychips would be effective from 1 March 1994, in line with the Supreme Industries Ltd. decision. The application was allowed to the extent indicated, and the necessary amendments were made to the Final Order.