2024 (3) TMI 1504 - AT - Customs

Tribunal recalls final order for ignoring DRI jurisdiction challenge under Section 28 Customs Act, cites Mangali Impex

CESTAT Mumbai allowed the applications for rectification of mistake filed by the appellant-importer. The Tribunal held that the earlier final order ... Rectification of mistake - Jurisdiction of DRI to issue SCN - Job work is prohibited in DEEC Scheme for fulfilling export obligation or not - sending goods for job work amount to transfer of ownership/ title of goods amounting to breach of Custom Notification 30/97 or not - demand is hit by limitation period when Department had complete knowledge of job work - SCN proceeds to demand duty on the allegation of excess import - HELD THAT:- It is clear that the appellants have raised the issue of jurisdiction of DRI to issue show-cause notices and have relied upon the case of Mangali Impex [2019 (8) TMI 1941 - SC ORDER]. However, on going through the impugned order, it is found that the Bench has not gone into the issue of jurisdiction of DRI to issue the impugned show-cause notice. No findings were also given on the applicability of the decision in the case of Mangali Impex. It is aso found that it does not require a long-drawn argument or reasoning to see that the Bench has not considered the submissions of the appellants as far as the case of M/s Mangali Impex. To that extent, the mistake appears to be evidently apparent on record. A co-ordinate Bench of this Tribunal in the case of SEAMEC Ltd. [2018 (4) TMI 422 - CESTAT MUMBAI] held that disregard of the primary contentions of the appellant and various judicial decisions dealing with similar matter while deciding dispute of classification of ships, was an error apparent on record and is required to be rectified. In view of the same, as the primary contention of the appellants based on the decision in the case of Mangali Impex is not considered, it amounts to an error apparent on record, the non-mitigation of which would put the case of the appellants in jeopardy. Therefore, it is found that the impugned order requires to be recalled for a fresh consideration on the above issue and other issues raised by the applicant. The applications for rectification of mistake are allowed. 1. ISSUES PRESENTED AND CONSIDERED (1) Whether non-consideration of the assessee's primary contention on the jurisdiction of the Directorate of Revenue Intelligence to issue the show cause notice, based on the decision in 'Mangali Impex', constitutes a 'mistake apparent on record' warranting rectification and recall of the final order. (2) What is the scope of rectification of mistake under the applicable rectification provision and principles laid down by higher courts on 'error apparent on the face of the record', particularly where a binding or relevant judicial precedent has not been considered. 2. ISSUE-WISE DETAILED ANALYSIS Issue (1): Non-consideration of contention on DRI jurisdiction based on 'Mangali Impex' as a mistake apparent on record Interpretation and reasoning (a) The Tribunal noted that, in the earlier final order, it had recorded the specific issue 'whether DRI has jurisdiction to issue the show-cause notice in view of the Delhi High Court judgment in Mangali Impex Ltd.' as one of the questions requiring consideration, and that the assessee had relied upon that judgment. (b) On examination of the earlier final order, the Tribunal found that it had not gone into the issue of DRI's jurisdiction and had given no findings on the applicability or otherwise of the decision in 'Mangali Impex'. (c) The Tribunal observed that it does not require any long-drawn reasoning or elaborate examination to see from the face of the record that the submissions based on 'Mangali Impex' were not considered at all; this omission is evident on mere perusal of the earlier order. (d) Relying on the principles laid down by the Supreme Court in 'Saurashtra Kutch Stock Exchange Ltd.', the Tribunal reiterated that: - An error apparent on the face of the record is a patent, manifest, self-evident error that does not require elaborate discussion of evidence or argument. - Non-consideration of a decision of a jurisdictional court or of the Supreme Court can constitute a 'mistake apparent from the record' capable of rectification. - Judicial decisions generally act retrospectively and clarify the correct legal position. (e) The Tribunal also relied on its co-ordinate bench decision in 'SEAMEC Ltd.', where disregard of primary contentions and various judicial decisions dealing with similar issues was held to be an error apparent on record requiring rectification. (f) Applying these principles, the Tribunal held that non-consideration of the assessee's primary contention based on 'Mangali Impex' regarding DRI jurisdiction was an error apparent on record, and leaving such error unrectified would jeopardize the assessee's case. Conclusions (g) Non-consideration of the assessee's principal argument founded on the judgment in 'Mangali Impex' concerning DRI's jurisdiction to issue the show cause notice is a 'mistake apparent on record'. (h) Such mistake is self-evident from the earlier final order and does not require a long-drawn process of reasoning; it therefore falls within the permissible scope of rectification. (i) On this ground, the earlier final order is required to be recalled for fresh consideration of the DRI jurisdiction issue and the other issues raised by the applicant. Issue (2): Scope of rectification of mistake and applicability of higher judicial precedent Legal framework (as discussed) (a) The Tribunal referred to the principles laid down by the Supreme Court in 'Saurashtra Kutch Stock Exchange Ltd.' regarding: - The nature of 'error apparent on the face of the record'. - Rectification power and its limits. - Effect of non-consideration of binding or relevant judicial decisions. - The retrospective operation of judicial decisions and the doctrine of precedent. (b) The Tribunal also noted the reasoning in 'S. Nagaraj v. State of Karnataka' (quoted in 'Saurashtra Kutch Stock Exchange Ltd.'), which underlines that rectification stems from the fundamental principle that justice is above all and that courts may recall orders passed under a mistake where its perpetuation would cause injustice. Interpretation and reasoning (c) The Tribunal accepted that: - An error is 'apparent on the face of the record' when it strikes on mere looking at the order and does not need extraneous material or elaborate argument. - If the view taken in the original judgment is one of the possible views, it cannot be treated as such an error; however, complete non-consideration of a directly relevant or binding precedent stands on a different footing. (d) It further accepted the principle that: - Non-consideration of a decision of the jurisdictional High Court or the Supreme Court-rendered either prior or subsequent to the order-can constitute a 'mistake apparent from the record' and may be corrected by the Tribunal under its rectification powers. (e) The Tribunal relied on the co-ordinate bench decision in 'SEAMEC Ltd.' to reinforce that disregard of primary contentions and relevant judicial decisions is rectifiable as an error apparent. Conclusions (f) The Tribunal has jurisdiction, in rectification proceedings, to correct an order where a directly relevant or binding judicial precedent or primary contention based thereon has not been considered. (g) In exercise of this power, and guided by the above principles, the Tribunal recalled the earlier final order and directed that the matter be placed before the appropriate Bench for fresh hearing and adjudication on all issues, including the DRI jurisdiction issue founded on 'Mangali Impex'.