Ignoring a cited binding precedent in arguments treated as "error apparent", leading to recall of the order

The dominant issue was whether failure to consider a precedent cited during arguments constitutes an "error apparent on the face of the record" warranting rectification. Applying the SC principle that non-consideration of a binding or material decision relied upon by counsel is a rectifiable mistake, the tribunal held that omission to consider the cited HC ruling-though under appeal before the SC-went to the root of the matter and amounted to an error apparent. Consequently, the impugned order was recalled and the rectification application was allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the Tribunal's failure to consider a judicial decision specifically relied upon during arguments constitutes an "error apparent from record" amenable to rectification under Section 35C(2) of the Central Excise Act, 1944.

(ii) Whether, upon finding such error, the appropriate rectification is to recall the final order and relist the appeal, including directions to the parties to verify and report the status of the relied-upon decision's further proceedings.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Non-consideration of relied-upon decision as "error apparent from record" under Section 35C(2)

Legal framework (as discussed): The Tribunal entertained a rectification application under Section 35C(2) on the premise that rectification is permissible where there is a mistake apparent from the record. The Tribunal treated "non-consideration of a decision cited during arguments" as falling within this scope, relying on the principle that a Tribunal must correct prejudice caused by its own mistake, error, or omission when the material was already before it.

Interpretation and reasoning: The Tribunal noted that the final order had recorded that the applicant relied upon a particular decision during submissions, but no finding was recorded in respect of that reliance. The Tribunal further observed that the cited decision had been appealed and that the revenue's appeal was pending before the Supreme Court; however, the pendency did not negate that the cited decision was placed before the Tribunal and required consideration. The Tribunal treated the omission to consider that cited decision, despite being part of the arguments and record, as an error apparent from the record warranting rectification.

Conclusion: The Tribunal held that non-consideration of the decision referred to during the course of arguments constituted an error apparent from the record, justifying exercise of rectification power under Section 35C(2).

Issue (ii): Appropriate rectification-recall of final order and directions regarding status of pending proceedings

Legal framework (as discussed): Having found an error apparent from record, the Tribunal proceeded to determine the corrective measure within its rectification jurisdiction.

Interpretation and reasoning: The Tribunal accepted the submission that the relied-upon decision "goes to the root of the matter" and, therefore, considered it appropriate to recall the earlier final order rather than merely issuing a limited correction. Since the relied-upon decision was stated to be under challenge before the Supreme Court, the Tribunal directed both sides to ascertain and inform the registry of the current status so that the matter could be listed accordingly.

Conclusion: The Tribunal recalled the earlier final order, allowed the rectification application, and directed the registry to take consequential steps, with parties instructed to verify and report the Supreme Court status of the relied-upon decision for appropriate listing.

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