2019 (7) TMI 446 - HC - Central Excise

Court upholds time-barred Rectification Application, clarifies limitation period

M/s. Fairline Worldwide Express Versus Commissioner of Central Excise, (Service Tax), Pondicherry

The High Court dismissed the civil miscellaneous appeal filed by M/s.Fairline Worldwide Express, upholding the rejection of its Rectification Application ... Time Limitation of Rectification Application - the application was filed beyond a period of limitation of six months - Section 35C(2) of the Central Excise Act, 1944 - HELD THAT:- There is no merit in the present appeal filed by the Assessee. Sub Section (2) of Section 35C of the Act, does not envisage any such distinction of the rectification application being made by the party or rectification proceedings undertaken by the Tribunal suo-motu on its own. The period of limitation of six months was substituted for a period of four years by the Finance Act 2002 with effect from 11.05.2002. We are concerned with this post amendment limitation of six months only - The application for rectification apparently can be filed either by Revenue Authority or by the other party to the appeal (the Assessee concerned). The provision does not even provide for a suo-motu rectification by the learned Tribunal. Therefore, restricting the application of a period of limitation only if the learned Tribunal itself undertakes such rectification proceedings cannot be applied, as contended by the learned counsel for the Assessee. Admittedly, in the present case, the orders sought to be rectified was passed on 19.02.2010, for which the application for rectification by the Assessee was filed beyond the period of limitation but no date of filing of such rectification application was given by the Assessee. Decided against assessee and in favor of Revenue. Issues:1. Rectification application filed beyond the limitation period under Section 35C(2) of the Central Excise Act, 1944.2. Interpretation of the provisions of Section 35C(2) regarding rectification of mistakes by the Appellate Tribunal.3. Applicability of the limitation period for rectification applications by either party involved in the appeal.Issue 1:The Assessee, M/s.Fairline Worldwide Express, filed an appeal against the order of the CESTAT rejecting its Rectification Application due to being filed beyond the six-month limitation period under Section 35C(2) of the Central Excise Act, 1944. The Tribunal dismissed the rectification application as time-barred, leading to the present appeal.Issue 2:The Assessee contended that the Tribunal erred in rejecting the rectification application based on limitation, arguing that the limitation period should only apply if the Tribunal initiates rectification proceedings on its own. However, the High Court held that Section 35C(2) does not differentiate between rectification applications made by the party or initiated by the Tribunal. The provision allows for rectification if a mistake is apparent from the record, with a limitation period of six months post-amendment in 2002. The Court emphasized that the limitation period applies to both parties seeking rectification.Issue 3:The Court noted that the Assessee failed to disclose the date of filing the rectification application, questioning the relevance of raising the limitation issue without providing this crucial information. As the Tribunal rejected the application based on limitation, and no contrary evidence was presented, the Court found no merit in the Assessee's argument. The questions raised in the appeal were answered against the Assessee, favoring the Revenue. Consequently, the civil miscellaneous appeal was dismissed, with no costs imposed, and the connected miscellaneous petition was closed.This judgment primarily dealt with the rectification application filed beyond the limitation period under Section 35C(2) of the Central Excise Act, 1944. The High Court clarified the interpretation of the provision, emphasizing that the limitation period applies to both parties involved in seeking rectification. The Court's decision was based on the statutory framework and the lack of sufficient evidence to support the Assessee's argument against the limitation period.