TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 358
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....standing counsel for the appellant and after going through the records, the present judgment is being passed. 2. The above appeal was admitted on the following substantial question of law :- "(i) Whether the first respondent is right in recalling its order in the guise of exercising power under Section 35C(2) of the Central Excise Act, which provides for error apparent on the face of the record?" 3. The assessee is engaged in the manufacture of aerated waters falling under Chapter sub-heading 2202.02 of the Central Excise Tariff Act, 1985. They also manufactured 'Slice' a fruit pulp based soft drink/fruit juice based soft drinks falling under Chapter sub-heading 2202.40, which was fully exempted from payment of duty under ....
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....toms, Excise and Service Tax Appellate Tribunal, by contending that Rule 6(3)(b) of CCR, 2004 would not be applicable in respect of furnace oil, since entire Cenvat credit availed on furnace oil was already reversed, much before the issuance of show cause notice and the same was also communicated to the Revenue. In considering the assessee's contention, in the order dated 30-4-2007, the Tribunal pointed out that when the assessee had not maintained separate accounts in respect of furnace oil used in the manufacture of both dutiable and exempted final products and cleared by the assessee during the material period, the impugned clearance attracted the provisions of Rule 6(3)(b) of CCR, 2004. The Tribunal further pointed out that subsequent r....
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....e plea of the assessee on this and corrected its order. It was pointed out that the assessee had not taken credit on furnace oil from 1-9-2005 and hence, the provisions were not applicable. It is not seriously canvassed by the Revenue that considering the fact that Rule 6(2) was amended under Notification No. 27/2005, the same would not be applicable to the period prior to 16-5-2005. 7. The second mistake pointed out by the assessee seeking rectification was on the question as to whether subsequent reversal of Cenvat credit taken on inputs used in the manufacture of exempted final product would tantamount to non-availment, of such credit so as to render Rule 6(3) inapplicable. On this, the Tribunal considered the decisions of the Supr....
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....ntire credit availed on furnace oil. Thus, on the findings given, the demand in terms of Rule 6(3)(b) of the CCR, 2004 was set side. 9. Aggrieved by this, the present appeal by the Revenue. Learned standing counsel appearing for the Revenue submitted that in the guise of rectification, the Tribunal had practically reviewed its order. In the absence of any provision on review and on facts which are not admitted and there being no error apparent, the order of the Tribunal suffers serious illegality and hence liable to be set aside. While not disputing the fact that the assessee had reversed the entire credit taken on furnace oil during the material period, learned standing counsel submitted that the only option available in cases where ....
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....ngly applied the amended Rule to the prior period from 1-10-2004 to 15-5-2005 when the said rule was not in operation. Thus, the dispute on question of applicability of Rule 6 would arise only for the period 16-5-2005 to 31-8-2005 and not for the period prior to or after that date. Learned standing counsel pointed out that the Revenue's dispute is particularly related to the contention of the assessee on the reversal of credit as amounting to non-availing of credit as an error apparent requiring rectification. We find justification in the Revenue's contention that when the rectification of mistake sought for is an arguable issue, the Tribunal erred insofar as the rectification of second mistake is concerned and the same could not be conside....
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....decided in ITO v. Ashok Textiles, 41 ITR 732 that while rectifying a mistake, an erroneous view of law or a debatable point cannot be decided. Moreover, incorrect application of law can also not be corrected." 13. In the decision reported in 2003 (151) E.L.T. 481 (S.C.) (Commissioner of Central Excise, Calcutta v. A.S.C.U. Ltd.), the Apex Court observed as follows : "13. .........the scope of correction which can be made by the Tribunal under Section 35C(2) is limited. Undoubtedly if a decision is based solely on material which is irrelevant or which could not have been used then possibly it could be said that there is a mistake apparent from the record. However, if a decision is based ....