2006 (4) TMI 136 - SC - Central Excise

Supreme Court affirms Tribunal's decision on Electric Motors valuation under Tariff Entry 8501.00

COMMISSIONER OF CENTRAL EXCISE, MUMBAI Versus BHARAT BIJLEE LIMITED

The Supreme Court upheld the Tribunal's decision regarding the valuation of Electric Motors under Tariff Entry 8501.00. The Court found that the ... Rectification of mistake - Jurisdiction of Tribunal to rectify mistake - Non consideration of relevant evidence - Held that:- After going through the earlier order [1996 (6) TMI 204 - CEGAT, MUMBAI] passed by the Tribunal and the impugned order, we are satisfied that the Tribunal had failed to take into consideration the material evidence which was present on the record. Failure to take into consideration the material evidence, which is present on the record, would certainly amount to mistake apparent on the face of the record and the Tribunal under the circumstances would have the jurisdiction to correct the said mistake in exercise of its powers under Section 35C(2) of the Act - Decided against Revenue. Issues: Valuation of Electric Motors under Tariff Entry 8501.00; Rectification of Tribunal's Order under Section 35C(2) of the Central Excise Act, 1944.Valuation of Electric Motors:The primary issue in this appeal pertains to the valuation of Electric Motors classified under Tariff Entry 8501.00. The Tribunal initially held that the respondent's claim regarding the difference between standard and non-standard motors lacked factual justification. It noted the absence of evidence demonstrating that non-standard motors were manufactured based on specific dealer orders. However, in the impugned order, the Tribunal acknowledged the evidence provided by the dealer, proving that non-standard motors were indeed produced as per specific orders supported by relevant documents. This led to a reevaluation of the valuation of the motors based on the distinct manufacturing processes for standard and non-standard types.Rectification of Tribunal's Order under Section 35C(2):The crux of the matter revolves around the Tribunal's authority to rectify its earlier order under Section 35C(2) of the Central Excise Act, 1944. The Revenue contended that the Tribunal exceeded its jurisdiction by rectifying the order based on a factual mistake. The Revenue relied on a precedent emphasizing the limited scope of correction permissible under Section 35C(2). However, upon review, the Supreme Court found that the Tribunal's rectification was justified as it had failed to consider crucial material evidence in its initial order. The Court determined that the omission to evaluate such evidence constituted a mistake apparent on the face of the record, granting the Tribunal the authority to rectify its decision. Consequently, the Court upheld the impugned order, dismissing the appeal and directing each party to bear their own costs.In conclusion, the Supreme Court's judgment delved into the intricate details of the valuation of Electric Motors and the Tribunal's power to rectify its orders under Section 35C(2) of the Central Excise Act, 1944. By meticulously analyzing the evidence and legal precedents, the Court affirmed the rectification made by the Tribunal, emphasizing the importance of considering all material evidence in decision-making processes within the realm of excise valuation disputes.