Customs, Excise and Gold Tribunal - Delhi
Dalmia Laminators vs Collector Of Central Excise on 19 February, 1991
Equivalent citations: 1992(39)ECC189, 1991(56)ELT571(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The above application for rectification of mistakes apparent from the record of the Tribunal in its Order No. 902/87-D in E/A/307/83-D, dated 16-11-1987 arises in the following background :-
2. The dispute in the appeal related to the classification of laminated jute-bags- whether under T.I. 22A as contended by the applicants/appellants or under T.I. 68 as held by the Department. The Tribunal upheld classification under T.I. 68 following the decision of the Calcutta High Court in the case of Dalhousie Jute Co. Ltd. [AIR 1970 Cal. 497] which was followed by the Tribunal in the cases of Birla Jute Mfg. Co. Ltd. [1986 (26) ELT 1032], Shriram Jute Mills Lid. [1986 (23) ELT 446] and Innes Watson & Co. [1987 (9) ETR 363]. The applicants submit that the Tribunal has wrongly observed that T.I. 22A was amended in 1972 as it was substituted, not amended, in 1972 and by the substitution, 2 exceptions were carved out in respect of jute manufactures containing jute & wool and those in which the weight of wool fell below a certain percentage. Similarly, the observation about the same Tariff Hem as it stood in 1977 is erroneous as only part of the entry has been extracted and the entries relating to (1) HESSIAN AND (2) Others have not been considered. The Tribunal has also erred in misconstruing Explanation II to T.I. 19 which provides only for determination of the classification of fabrics in which 2 or more specified fibres are equal in weight to conclude that T.I. 22A would not encompass a manufacture comprising jute and any other article not falling under T.I. 22A such as in the present case, wherein the other constituent is laminated plastic film. The further submission is that the Calcutta High Court decision has been wrongly applied as it deals with pre-1971 Tariff Entry while the period in this appeal is governed by the post-1971 Tariff Entry, and the judgment of the A. P. High Court in the case of International Packing Industry [1987 (32) ELT 317] determining classification under T.I. 22A covers the case (this judgment was not cited before the Bench during the hearing of the appeal) - the Tribunal has followed this judgment in the case of Calcutta Laminates v. CCE 1988 (12) ETR 550, The Tribunal has also erred in not considering the ground raised in the appeal regarding applicability of exemption Notification No. 53/65.
3. We have heard Shri Chidambaram, learned Sr. Advocate and Shri J. N. Nair, learned DR.
4. It is a well-settled proposition of law that a mistake which is sought to be rectified in an order of the Tribunal must be one which is apparent on the face of the record and not one which is required to be established by a long drawn out process of reasoning on points on which there may conceivably be more than one opinion.
It is also a well-settled proposition of law that the power of review of its own order is not inherent in any authority. Such power has to be conferred explicitly by the statute. CEGAT indisputably has no power of reviewing its orders.
5. The question here is whether the view taken by the Tribunal in Order No. 902/87-D, dated 16-11-1987 based on the judgment of the Calcutta High Court in the case of Dalhousie Jute Co. Ltd. AIR 1970 Calcutta 497 - can be said to be a mistake apparent on the face of the record in the light of a judgment of the Andhra Pradesh High Court in International Packing Industry v. C.B.E. C., New Delhi and Ors. -1987 (32) ELT 317 (A.P.). The answer would be undoubtedly in the negative if the law construed by both High Courts was the same, in which case, the differing views expressed by the two High Courts would amount only to expression of two different views and if the Tribunal has chosen to rely on one view rather than the other, it cannot be said to be a mistake. In the present case, the situation is different. As may be seen from the Order No. 902/87-D, dated 16-11-1987, the Tribunal had based its decision on its own previous decisions as also a judgment of the Calcutta High Court in the absence of any other judgment of any High Court to the contrary on the question of classification of the subject goods. The judgment of the Andhra Pradesh High Court in International Packing Industry case came to be delivered on 23-7-1987 and, perhaps, it had not been reported by the time the appeal came up for hearing. However, the fact remains that the judgment was in existence even prior to 9-9-1987 when the appeal was heard and on 16-11-1987 when the Tribunal rendered its decision. Therefore, while it is true that the Andhra Pradesh High Court's judgment was not placed before the Bench during the hearing nor was the attention of the Bench drawn to it subsequently before the final order was passed, it cannot be gainsaid that the Bench had proceeded on a mistaken impression (mistaken, suit turns out to be) that there was no judgment of any High Court on the classification of the goods in question other than that of the Calcutta High Court. To that extent, it may be said that there was a mistake although it might be somewhat difficult to say that it was a mistake apparent on the face of the record as it existed at the time of the hearing or at the time of making the final order.
6. However, the matter is not so simple. The Supreme Court had occasion to consider the scope of the power of the ITAT to rectify mistakes in its orders. In Venkatachalam v. Bombay Dyeing & Manufacturing Co. Ltd. - 1958 (34) ETR 143, the question for decision was whether an order proper and valid when made could be said to disclose a mistake apparent from the record merely because it became erroneous as a result of subsequent amendment of the law which was retrospective in its operation. The Court held as follows :-
"At the time when the I.T.O. applied his mind to the question of rectifying the alleged mistake, there can be no doubt that he had to read the principal Act as containing the inserted proviso as from April 1,1952. If that be the true position then the order which he made giving credit to the respondent for Rs. 50,603-15-0 is plainly and obviously inconsistent with a specific and clear provision of the statute and that must inevitably be treated as a mistake of law apparent from the record. If a mistake of fact apparent from the record of the assessment order can be rectified under Section 35, we see no reason why a mistake of law which is glaring and obvious cannot be similarly rectified."
7. The Bombay High Court in Walchand Nagar Industries Ltd. v. V.S. Gaitonde, I.T.O. (1962) 44 ITR 260 was dealing with the question whether there could be said to be a mistake apparent from the record in the peculiar facts of that case. The levy of tax was admittedly good on the date on which the ITO made the assessment order. It was only thereafter that the Supreme Court declared that the levy of that particular tax (the levy of excess dividend tax) was invalid in a judgment rendered in another case. The Counsel for the respondent (I.T.O. & others) sought to distinguish the facts of the case from those in the Venkatachalam case (supra) by submitting that while the order made by the ITO in the Venkatachalam case was rendered mistaken by a subsequent enactment, the order in the Walchand Nagar Industries case, which was a good order, was rendered bad as a consequence of a subsequent judicial pronouncement. The Court negatived this contention by stating as follows :-
"The effect of the decision of their Lordship of the Supreme Court is that the levy of excess dividend tax was, at no time, good. The levy was invalid, and that being the true legal position, the order made by the Income Tax Officer was bad at its inception on the date it was made, and that was a mistake; to point out that mistake, no elaborate argument or debate is required, because there is the binding Supreme Court decision, clearly bringing out that mistake. The mistake, therefore, in our opinion, is a mistake apparent from the record, within the meaning of Section 35 of the Act. The authorities concerned, i. e., the respondents, were therefore clearly in error in not rectifying that mistake under Section 35 of the Act."
8. In the instant case before us, it may be mentioned that the judgment of the Calcutta High Court which was relied on by the Tribunal in its order dated 16-11-1987 was reported in AIR 1970 Calcutta 497 and the Division Bench, on appeal, affirmed the judgment of the Single Judge on 14-8-1985. Evidently, the Calcutta High Court could not have taken note of the changes in the wording of the Tariff Entry 22A of the Central Excise Tariff Schedule in 1972 and 1977. On the other hand, the Andhra Pradesh High Court judgment which was delivered in 1987 has considered the changes and the period of dispute in the present appeal is from 1-3-1975 to 5-6-1979, The tariff entry underwent some changes in 1972 and again in 1978. It is, therefore, clear that it is the Andhra Pradesh High Court judgment, and not the Calcutta High Court judgment, that was appropriate to the facts of the present case. In the light of this judgment, the view taken by the Tribunal in the impugned order was a mistake. In this connection, we note that the Supreme Court has held in the case of SAL Narayana Row v. Model Mills, Nagpur 1967 (64) ITR 67 that the Income Tax Appellate Tribunal is competent to rectify its order based upon a subsequent decision of the High Court.
9. As a result, in view of the judgment of the Hon'ble Andhra Pradesh High Court in the case of International Packing Industry (supra), we hold that the item in dispute falls for classification under T.I. 22A (and not under T.I. 68) and is entitled to the benefit of Notification 53/65 dated 20-3-1965 which grants exemption to laminated jute bags from so much of the duty leviable thereon as is in excess of the duty payable on the processed jute manufactures used in their manufacture.
10. The ROM application is accordingly allowed.