Customs, Excise and Gold Tribunal - Delhi
Montana Valves And Compressors (P) ... vs Cc on 8 December, 2000
Equivalent citations: 2001(75)ECC266, 2001(138)ELT203(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. This is an application stating that a mistake has crept in the Final Order No. A/963-66/99-NB dt.29.10.99. It has therfore been prayed that the mistake may be rectified.
2. The mistake is reported to be that the Hon'ble Calcutta High Court in the case of Union of India v. Kumar Trading Co. held that "A close scrutiny of Section 111(o) pre-supposes that goods should be of exempted category, but there is no exemption notification pertaining to these goods has been brought to the notice of the Court. Section 111(o) in the present case is wholly inapplicable. In fact, the goods were imported under the letter of credit issued by M/s. Nitu Enterprises of Nepal from another contracting party M/s. Kumar Trading Co. of Dubai. Goods were being transhipped from Dubai to Kathmandu via Calcutta Port. Therefore, the Customs Authority could not have checked these goods as there is no such provision for such goods being confiscated on a mere apprehension that they are bona-fidely (sic) meant to be transhipped to Nepal but for consumption in India. In fact goods are being transhipped through Calcutta Port in pursuance of the Transit Treaty which has been entered into between Nepal and Government of India. In pursuance of this transit treaty goods have to be cleared by the Customs Authorities and they can ensure that the goods are transported from Calcutta Port to the destination at Nepal. As per Clauses 5, 6, 7 and 8 of the Customs Transit Treaty entered into between two Sovereign Nations, India and Nepal, the Customs Authority should not have caused any hurdle in such transportation. In the scheme of things it is not understandable how could the Customs Authorities on a bare apprehension that the goods may be used for consumption in India can issue such a show cause notice. Section 111(o) cannot be stretched to this extent to include the present situation so as to enable the authorities to issue show cause notice for confiscation of the goods. The goods do not fall in the category of exempted goods as no such exemption notification exists. The goods are covered by the Indo-Nepal Transit Treaty. Therefore, Section 111(o) in the present case is not applicable. Since 111(o) is not applicable in the present case there is no question of issuing show cause notice or initiating proceeding under Section 124 as the authorities lack of jurisdiction. Normally, the issuance of show cause notice is not interfered by the Court but if it could be shown that the exercise of the power by the authority was nonexistent or there is total lack of jurisdiction then Court can certainly interfere in such show cause notice." It has therefore been contended that Section 111(o) does not apply to a case where the imported goods are not exempted vide any exemption notification issued under Section 25 of the Customs Act, 1962. It has been pleaded that in the above final order, the Tribunal has unpheld the penalty under Section 111 (o) despite the fact that the imported goods were not exempt under any exemption notification but only under Section 69 of the Customs Act. Applying the ratio of this judgment of the High Court and there being no contrary judgment of any court on the subject, it has been prayed that the ROM may be allowed. In support of this contention, the applicant has cited the following judgments:
1. Watchand Nagar Industries Ltd. v. Caitonde, ITO, Co. Circle (3) Bombay
2. Deuendra Prakash v. ITO, Bareilly 1969 (72) ITR 72 (AH.)
3. K.B. Foams (P) Ltd. Deputy Commissioner of Commercial Taxes, Bangalore City Division, Bangalore-9 1986 (62) STC 233 (Kar.)
4. Zdzizlaw Skakuz v. Commissioner of Income Tax
5. Nau Nirman P. Ltd. a Commissioner of Income-Tax 1988 (174) ITR 574 (MP).
3. Ld. Advocate submits that the only point he would like to argue in the present case is that penalty has been imposed for violation of Section 111(o); that there was no violation of Section 111(o) inasmuch as the goods in dispute were not cleared pursuant to any exemption notification having conditions attached to it and that the Hon'ble Calcutta High Court has held that if there was no exemption notification, the penalty cannot be imposed under Section 111(o).
4. Ld. Counsel submits that there are a number of judgments in which it has been held that the ROM application is maintainable on the basis of subsequent court decision in view of the following cases:
1. S. Shankappa and others v. ITO, Bangalore
2. SA.L. Narayana Row, CIT v. Model Mills Nagpur Limited
3. M.K. Venkatachalam, ITO v. Bombay Dyeing & Manufacturing Co. Ltd.
4. State of Kerala v. P.K. Syed Akbsar Sahib
5. ITO v. Alwaye v. Ashok Textiles Limited
6. Poothundu Plantations (P) Ltd. v. AITO, Chitoor, Kerala State 1996 (66) ECR 224 (SC)
7. Bhagwandas Kevaldas v. N.D. Mehrotra
8. Walchand Nagar Industries Ltd. v. V.S. Gaitonde ITO 1962 (44) ITR 26C (Bom.)
9. B.V.K. Seshavataram, Bangaru Muralidhar, Bangaru Manikyam v. CIT
10. South Madras Electric Supply Corporation Ltd. v. First ITO Tiruchirapalli
11. V. Govindraju Chetty v. CTO, Hassan 1968 (22) STC 46 (Mysore)
12. Devendra Prakash v. ITO, Bareilly
13. Zdzizlaw Skakuz v. CIT
14. Nau Nirman P. Ltd. v. CIT 1988 (174) ITR 574 (MP)
15. K.B. Foams (P) Ltd. v. Dy. Commissioner of Commerical Taxes 1986 (62) STC (Kar.)
16. Dalmia Laminators v. CCE
17. Madura Coats v. CCE .
5. Ld. Advocate submits that the import took place in the jurisdiction of the Hon'ble Bombay High Court and that SI. Nos. 7 and 8 pertain to the decisions given by the Bombay High Court and, therefore they are binding on the Tribunal and prays that the ROM application may be allowed.
6. Shri Rajeev Tahdon, Ld. SDR submits that the Larger Bench of this Tribunal in the case of Gujarat State Fertilizers & Chemicals Limited v. CCE observed that "It is worthwhile to notice that the power to rectify any mistake under Section 35C(2) can be exercised only if the mistake is apparent from the record. Under the cover of an application for rectification of mistake, Tribunal is not to exercise Appellate Power of review against the order passed earlier. The Appellate Tribunal denied the exemption under Notification No. 40/85 to the appellants in respect of ammonia used in the manufacture of molten urea holding that only that ammonia which is utilised for the production of Mineral or Chemical Fertilizers will be eligible for the benefit of the Notification. As the Tribunal had followed its earlier decision and the appellants were aggrieved with the decision of the Tribunal the right course open to them was to tile an appeal in the Supreme Court under the provisions of Section 35L. The appellants are in fact seeking, by moving an application for rectification of mistake, recall of the impugned order under Section 35C(12) on the basis of Supreme Court's subsequent decision. In their case in appeal for allowing the benefit of Notf. No. 40/85 required to be filed and as such wherein appeal is to be filed, an application for rectification of mistake apparent from record cannot lie. If, a judgment which is already in existence and non-citing of the judgment cannot be a ground for receiving the order as per the judgment of Supreme Court, it is incomprehensible that a subsequent decision, which was not there on the day order was passed, can be a ground for rectifying the order. A subsequent decision of the Supreme Court cannot form the basis of an application for rectification of mistake in the interest of finality of decisions. If a subsequent decision is held to be the basis for an application for rectification of mistake, the finality of any decision will be hit adversely as subsequent decisions can be made basis for moving an application for rectification from time to time." He submits that this is the second ROM being filed by the applicants. He submits that the Larger Bench of this Tribunal held that second ROM will not be permissible. He submits that the Hon'ble Calcutta High Court's judgment relied upon by the applicants was reported much after the decision of the Tribunal and the Tribunal had no benefit of this decision and that in view of the Larger Bench decision in the case of Gujarat State Fertilizers & Chemicals Limited wherein it has been clearly held by the Tribunal that a subsequent decision by a Tribunal or a High Court or Supreme Court is not to form the basis for rectification of mistake in terms of Section 35C(2). He, therefore prays that the ROM may be rejected.
7. We have heard the rival submissions. The admitted position in this case is that the decision of this Tribunal is dated 29.10.99. The decision of the Hon'ble Calcutta High Court is dated 4.7.2000 which was reported in the issue of ELT of first October, 2000. Thus the decision of the Hon'ble Calcutta High Court is of a date subsequent to the date of impugned order and, therefore, the decision of the Larger Bench of this Tribunal in the case of Gujarat State Fertilizers & Chemicals Limited is squarely applicable to the facts of the present case.
8. Further we find that a second ROM filed against an impugned order is not maintainable. Further from the study of the impugned order, we find that in sub-para of para 34, the Tribunal had observed that "It was contended for the appellants that since there was no violation of Section 111(j) and 111(o), therefore imposition of penalty was not warranted. We have considered the provisions of the above Sections of the Act. We are satisfied that there was contravention of these sections and we hold that imposition of penalty is sustainable in law." Thus we find that it is not only the sustainability of penalty under Section 111(o) but also under Section 111(j).
9. Following the ratio of the judgment of the Larger Bench of this Tribunal in the case of Gujarat State Fertilizers & Chemicals Limited, we hold that the ROM application is not maintainable, therefore the same is rejected.