Customs, Excise and Gold Tribunal - Delhi
Perfect Industries vs Commissioner Of Central Excise on 12 May, 2000
Equivalent citations: 2000(120)ELT463(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. In the instant case the applicant has filed an application stating that a mistake has crept in the final order of the Tribunal which may be rectified.
2. The facts of the case are that the applicant was directed to deposit a sum of Rs. 30 lakhs within a period of three months from the date of the order and to report compliance on 10-7-1997. The applicant filed a Misc. application for modification of the stay order. The Misc. application for modification of the stay order was rejected. The applicant, however, was given a further time of 12 weeks to make a pre-deposit and to report compliance. The applicant did not make the pre-deposit and therefore, the appeal was dismissed for non- compliance of the provisions of Section 35F of the Central Excise Act, 1944. The applicant has now filed the petition stating that since a mistake has crept in, in the Tribunal's order, the same may be rectified.
3. Arguing the case for the applicant Shri A.K. Jain, ld. Counsel submits that the Hon'ble Bombay High Court in the case of B.D. Steel and Traders v. U.O.I. reported in 1998 (103) E.L.T. 218 held.
"9. In the reply, it is stated that the appeal of the petitioner was dismissed for his own fault and now, the petitioner is estopped from making any grievance against the order passed by the Tribunal. It is further stated that the contention of the petitioner based upon the judgment relied upon by it cannot be accepted since the order of Tribunal dated 19-2-1997 is a result of non-appearance of the petitioner for hearing of the appeal before Tribunal. Because of non-compliance of the Tribunal's order, dated 19-6-19% present order came to be passed.
10. It is, therefore, clear that the impugned order came to be passed without hearing the petitioner. Dismissal of its appeal simplicitor for non-compliance of the condition for grant of stay, we feel, has no relation with dismissal of appeal in default. The Tribunal ought to have decided the appeal on merits. Since there is failure of principles of natural justice the impugned order is liable to be set aside and the matter requires to be remanded to the appellate authority for disposal in accordance with law".
He submits that the applicant is within the jurisdiction of Bombay High Court and that the Tribunal is bound to follow the judgment of the Hon'ble Bombay High Court. He submits that during the course of arguing the stay petition the judgment of the Hon'ble Bombay High Court could not be cited in-as-much as it was not published. He submits that this Tribunal in the case of Dalmia Laminators v. CCE reported in 1991 (56) E.L.T. 571 observed.
"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 hereon as is in excess of the duty payable on the processed jute manufactures used in their manufacture".
Ld. Counsel, therefore, submitted that even though the judgment of the Hon'ble Bombay High Court cited above could not be cited at the time of hearing the appeal. In view of the above said judgment of the Hon'ble H.C. in the case of Dalmia Laminators, the judgment of the Hon'ble Bombay High Court becomes applicable.
4. Ld. Counsel also submitted that the Hon'ble Supreme Court in the case of East India Commercial Co. Ltd. v. Collector of Customs, Calcutta reported in 1983 (13) E.L.T. 1342 ruled that -
"29. As we have already noticed in the earlier stage of the judgment, the notice issued by the respondent charges the appellants thus -
"One of the conditions of the special licence was that the goods would be utilised for consumption as raw material or accessories in the factory of the licence holder and no part thereof would be sold to other parties, but in contravention of that condition the appellants sold a part of the goods imported to a third party; and as the goods had been caused to be issued by fraudulent misrepresentation, they were liable to be confiscated under S. 167(8) of the Sea Customs Act".
"Section 167(8) of the Sea Customs Act can be invoked only if an order issued under S. 3 of the Act was infringed during the course of the import or export. The Division Bench of the High Court held that a contravention of a condition imposed by a licence issued under the Act is not an offence under S. 5 of the Act. This raises the question whether an administrative tribunal can ignore the law declared by the highest court in the State and initiate proceedings in direct violation of the law so declared. Under Article 215, every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Under Article 226, it has a plenary power to issue orders or writs for the enforcement of the fundamental rights and for any other purpose to any person or authority, including in appropriate cases any Government, within its territorial jurisdiction. Under Article 227 it has jurisdiction over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. It would be anomalous to suggest that a tribunal over which the High Court has superintendence can ignore the law declared by that court and start proceedings in direct violation of it. If a tribunal can do so, all the subordinate courts can equally do so, for there is no specific provision, just like in case of Supreme Court, making the law declared by the High Court binding on subordinate courts. It is implicit in the power of supervision conferred on a superior tribunal that all the tribunals subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working; otherwise, there would be confusion in the administration of law and respect for law would irretrievably suffer. We, therefore, hold that the law declared by the highest court in the State is binding on authorities or tribunals under its superintendence and they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. If that be so, the notice issued by the authority signifying the launching of proceedings contrary to the law laid down by the High Court would be invalid and the proceedings themselves would be without jurisdiction".
Ld. Counsel therefore, submitted that the judgment of the Hon'ble Bombay High Court in the case of B.D. Steel & Traders is binding and should have been followed. Since it has not been followed and therefore, a mistake has crept in.
5. Referring to the judgment of the Hon'ble Supreme Court in the case of Navin Chandra Chhotelal v. Central Board of Excise & Customs and Ors. reported in 1981 E.L.T. 679 (S.C.). Ld. Counsel submits that this judgment was distinguishable in-as-much as it was under the Customs Act and that it was for the period prior to the introduction of the corresponding Section in the Central Excise Act in 1982. He submits that since the ruling is under a different enactment, therefore, the same cannot be applied to the present case. He submitted that the Tribunal in the case of Madura Coats v. CCE, Bangalore reported in 1996 (82) E.L.T. 512 observed that the Tribunal has to follow the decision of jurisdictional High Court. However, Tribunal is free to formulate its own view in absence of any decision of jurisdictional High Court and when views of other High Courts conflicting the view of the jurisdictional High Court, the jurisdictional High Court view shall prevail.
In support of his contention that error apparent has been explained as The majority judgments, therefore, are defective on the face of them in that they did not effectively deal with and determine an important issue in the case on which depends title of the plaintiffs and the maintainability of the suit. This in our opinion is certainly an error apparent in the face of the record.
He cited and relied upon the decision of the Hon'ble Supreme Court reported in AIR 1954 SC. 526. Ld. Counsel, therefore, submitted that in view of the above submissions, the ROM may be allowed and the appeal may be listed for hearing.
6. Countering the arguments of the ld. Counsel Shri V.M. Udhoji along with Shri K. Srivastava, ld. DR submits that the scope of an application for rectification of mistake is based on mistake apparent on the record. He submits that in the instant case, there is no mistake apparent on the record. Ld. DR submits that the mistake is in the nature of argument and that such a mistake cannot be termed as a mistake apparent on the record. He submitted that the Hon'ble Delhi High Court in the case of Deeksha Suri v. Income Tax Appellate Tribunal reported in 1998 (102) E.L.T. 524 observed that the power to rectify any mistake apparent on the record does not contemplate a rehearing which would have the effect of re-writing an order affecting the merits of the case. He submits that the Hon'ble Delhi High Court held that what is not permitted by the statute having deliberately omitted to confer review jurisdiction on the Tribunal, cannot be indirectly achieved by recourse to Section 254(2) of Income-tax Act, 1961 corresponding to Section 35C(2) of Central Excise Act, 1944. He submitted that the Hon'ble High Court further observed that a decision on a debatable point of law is not a mistake apparent on the record. He submitted that an exemption notification is not an indicator of the correct classification of the goods under the tariff. In support of his contention he cited and relied upon the decision of this Tribunal in the case of CCE, Vadodara v. Gujarat State Fertilizers Co. Ltd. reported in 1996 (83) E.L.T. 624. Ld. DR submitted that the Hon'ble Allahabad High Court in the case of Dollar Detergents (P) Ltd. v. CEGAT, New Delhi reported in 2000 (116) E.L.T. 30 held that the Tribunal had partially waived the conditions and directed the petitioner to deposit only Rs. 75,000/-; that the petitioner prolonged the matter through writ petition which was ultimately dismissed. After the dismissal of writ petition the Tribunal's order became conclusive and there was no option for petitioner but to deposit the amount as directed by the Tribunal; that admittedly, it did not do so inspite of long time having elapsed and Tribunal having adjourned the matter more than once even after the dismissal of the writ petition by this Court. The Tribunal was therefore, left with no option but to dismiss the appeal because Section 35F barred entertaining the appeal unless the deposit was made. The Tribunal's order, therefore, is only in accordance with law and no case of interference under Article 226 is made out. Ld. DR submitted that in the case of Navin Chander Chhotelal relied upon by the applicants, the Hon'ble Supreme Court had held that although Section 129 of the Customs Act, 1962 does not expressly provide for rejection of the appeal for non-deposit of duty or penalty yet it makes it obligatory on an appellant to deposit the duty or penalty pending the appeal failing which, the appellate authority is fully competent to reject the appeal for non-compliance of the provision of Section 129(1) ibid. He submits that this decision of the Apex Court is applicable to the facts of the present case in-as-much as Section 35F of the Central Excise Act use similar words as those used in Section 129(1) of the Customs Act, 1962. He submitted that in view of this ruling of the Apex Court, the ruling of the Hon'ble Bombay High Court is not applicable.
7. We have heard the rival submissions. We have also perused the evidence on record and case law cited by both the sides. We find that the applicant has placed a lot of emphasis on the judgment of the Hon'ble Bombay High Court in the case of B.D. Steel & Traders by stating that this judgment was not cited at the time of hearing the stay petition and because the applicant is having his office and factory in the jurisdiction of Bombay High Court, therefore, this is binding on the Tribunal. We find that the respondents have placed reliance on the judgment of Hon'ble Supreme Court in the case of Navin Chander Chhotelal cited above. The Apex Court no doubt has held that the Appellate Authority is fully competent to reject the appeal for non-compliance of the provisions of Section 129(1) of the Customs Act, 1962. Though the decision is under Customs Act but we observe that Section 35F of the Central Excise Act, 1944 is similar to Section 129(1) of the Customs Act, 1962. Therefore, the ratio of the decision on Section 129(1) of the Customs Act will be fully applicable in Section 35F of Central Excise Act, 1944. Further the Hon'ble Allahabad High Court in the case of Dollar Detergents also held similar view. Having regard to the ruling of the Apex Court and the judgment of the Hon'ble Allahabad High Court, we find that no mistake has crept in, in the Final Order of the Tribunal. The ROM is, therefore, rejected.