2019 (12) TMI 1093

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d paid the duty before issuance of the show cause notice and therefore the penalty imposed cannot be sustained. For arriving at such a conclusion the Tribunal had placed reliance upon a decision of the High Court of Karnataka in Commissioner of C.Ex. v. Sreekrishna Pipe Industries [2004 (165) ELT 508 (Kar.)] and also on the orders passed by the Tribunal itself in similar cases. The Tribunal also observed that, the apex court in the case in Rashtriya Ispat Nigam Ltd. v. Commissioner of C.Ex., Visakhapatnam (2004 (163) ELT 113 (Tri.-Bang.) had set aside the penalty imposed under section 11AC of the Act on similar grounds. 3. Against Annexure-A order passed by the Tribunal, the Department (Revenue) had filed application seeking 'rectification of mistake', under Section 35C(2) of the Central Excise Act. The application for rectification of mistake was filed on the ground that, the position of law on the point has been declared through a subsequent decision of the Honourable Supreme Court in Union of India and Others v.Dharmendra Textile Processors and Others [2008 (231) ELT 3 (S.C)]. The application for rectification of mistake was opposed inter alia contending that, the sub....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....bsequent declaration of law through decision of the apex court can be considered as a mistake apparent on the face of the record, enabling a rectification under Section 35C(2) of the Act. 6. Learned Standing Counsel for the respondent, Sri.Thomas Mathew Nellimoottil, raised a preliminary dispute with respect to maintainability of the above said challenge, in view of the earlier order passed by the Tribunal allowing the application seeking the rectification of mistake, which remained unchallenged. In support of such a contention, he has drawn our attention to the provisions contained in Section 35G of the Act, which provides an appeal to the High Court from any order passed in an appeal by the Appellate Tribunal. Contention is that, since the appellant herein had not chosen to challenge the order of the Appellate Tribunal allowing the application for rectification of mistake, he is not entitled to challenge the consequential order passed to the extent of deciding the appeal afresh, based on the ground that recalling of the earlier order under the guise of rectification of mistake, was not legally sustainable. 7. Per contra, Sri.George Johnson, learned counsel appearing for the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he subsequent declaration of law is a reasonable ground to reverse its earlier decision in the appeal and to decide the matter afresh against the appellant? 10. Section 35C(2) provides that the Appellate Tribunal may at any time within six months from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Principal Commissioner of Central Excise or Commissioner of Central Excise or the other party to the appeal. Question to be examined is as to whether any subsequent decision of the Hon'ble Supreme Court on any legal point which was already decided in an appeal, which is having the effect of reversing the decision, can be considered as a mistake apparent from the record. In this regard, in a catena of decisions of the Hon'ble apex court it is held that, 'a mistake apparent on the record' must be an obvious and patent mistake and the mistake should not be such which can be established by a long drawn process of reasoning. The power to rectify a mistake should be exercised when the mistake is a patent one and should b....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ther a change of opinion declared in a subsequent judicial decision can be treated as a mistake apparent on the face of record to unsettle a decision which had attained finality. Further, it is a question as to whether such subsequent change of opinion will enable the authority to reopen the settled proceedings and to decide it afresh. 13. In this regard learned counsel for the appellant had cited a decision of the hon'ble Supreme Court in Commissioner of Central Excise, Calcutta v. ASCU Ltd., Calcutta[2003 (151) ELT 481(SC)]. After referring various precedents it was held that a mistake apparent on the face of the record must be an obvious and patent mistake and cannot be some thing which would have to be established by long drawn process of reasoning on points which there may conceivably be two opinions. A decision on a debatable point of law cannot be a "mistake apparent from the record". As such it is held that, 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 irregular or which could not have been used, then possibly it could be said that there is a mistake apparent....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pellate Tribunal & others(1988) 174 ITR 579, it is held that the rectification contemplated under Section 154 must be a "rectifiable mistake". It should be a mistake in the light of law in force at the time when the order sought to be rectified was passed. Therefore in Napco Industries Ltd. (supra) it was held by the apex court that, when there is a change of opinion, the department will be erred in invoking Section 154 of the Act. 16. In another decision of the apex court in Commissioner of Sales Tax, U.P. v. Bharat Bone Mill(2007) 210 ELT 6 (SC), after referring to the decision in Income Tax Officer, Alwaye v. The Asok Textiles Ltd. Alwaye[(1961) SCR 236] it was held that, provision for rectification of mistake apparent on the record, cannot be equated with the power of a civil court to review its own order as envisaged under Order XLVII Rule 1 of the Code of Civil Procedure. In the decision of the High Court of Calcutta in Smriti Properties Pvt. Ltd. v. Settlement Commission[(2005) 191 ELT 128(Cal)] it was held that, retrospective operation of the Supreme Court pronouncements on the interpretation of law can be made applicable only in cases which had not been decided finally ....