Binding later court rulings retrospectively override earlier Tribunal views and permit rectification of an apparent record error.

A binding declaration of law by the Supreme Court or jurisdictional High Court operates retrospectively as the correct legal position, so a Tribunal order contrary to that declaration contains an error apparent from the record. On that basis, non-consideration of the later binding decisions could be corrected under rectification powers under Section 35C(2) of the Central Excise Act, 1944. The Tribunal concluded that its earlier Larger Bench view in Gujarat State Fertilizers & Chemicals could not survive after the later superior court rulings, and answered the reference in the affirmative.

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Issues: Whether the Larger Bench decision of the Tribunal in Gujarat State Fertilizers & Chemicals stands overruled by the later decisions of the High Courts and the Supreme Court, so that rectification of the earlier order could proceed on the basis of a binding later declaration of law.

Analysis: The question turned on the effect of a later binding decision of the Supreme Court or jurisdictional High Court on an earlier Tribunal order, and whether non-consideration of such a decision gives rise to an error apparent from the record within the scope of rectification under Section 35C(2) of the Central Excise Act, 1944. The Tribunal held that once the superior court declares the law, that declaration operates as the law as it always was, and an order contrary to that legal position is liable to be corrected. Relying on the Gujarat High Court in RPG Life Sciences and the Madras High Court in V. Guard Industries, the Tribunal concluded that its earlier Larger Bench view could not survive.

Conclusion: The reference was answered in the affirmative, and the Larger Bench decision in Gujarat State Fertilizers & Chemicals was held to stand overruled.

Ratio Decidendi: A binding declaration of law by the Supreme Court or jurisdictional High Court applies retrospectively as the correct law, and an order contrary to that declaration contains an error apparent from the record capable of rectification.

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