Supreme Court of India
Commissioner Of Central Excise, ... vs Steelco Gujarat Ltd. on 10 December, 2003
Equivalent citations: 2003(163)ELT403(SC), (2003)12SCC731, [2005]142STC107(SC), AIRONLINE 2003 SC 179, (2004) 112 ECR 228, (2004) 163 ELT 403, 2003 (12) SCC 731, (2005) 142 STC 107
Bench: Ruma Pal, P. Venkatarama Reddi
ORDER
1. The question which arises in this appeal is whether the Tribunal could have set aside the earlier order passed by it under Section 35C of the Central Excise Act, (for short 'the Act').
2. The demand relates to an alleged quantity of Cold Rolled Coils alleged to have been wrongfully suppressed by the respondent from its returns filed under the Act. A show cause notice was issued and after hearing the assessee the Commissioner upheld the demand and imposed a penalty of Rs. 1.50 crores. The respondent preferred an appeal to the Tribunal. The Tribunal in paragraph 12 of its judgment upheld the particular demand for Rs. 1,47,00,127/-but reduced the penalty from Rs. 1.50 crores to Rs. 75 lakhs. The respondent made an application for rectification of the Tribunal's order under Section 35C of the Act claiming that the Tribunal had not considered its submission that the evidence relied upon by the Department, namely, the plant performance report could not show that the respondent had actually despatched the like amount because the plant performance report merely showed a stage in the manufacture of the Cold Rolled Coils and that the material would have to undergo further processes before it could be said that Cold Rolled Coils were complete. It is said that the RG 1 register would only reflect the subsequent stage when the finished product was available for being removed from the factory. There was in fact no discrepancy between the plant performance Report and the entry of RG 1 register if this fact was taken into consideration and therefore no suppression.
3. The Tribunal accepted the application for rectification and set aside the demand by upholding the plea of the respondent, it said.
"It has therefore on balance to be held that the department has not produced sufficient material to successfully establish beyond the reasonable doubt that the figures of production entered in the RG 1 register are incorrect. The demand for duty on this score cannot be confirmed. Consequently the penalty imposed on this score of Rs. 75 lakhs has also to be set aside."
4. The learned counsel appearing for the appellant has submitted that the Tribunal had clearly erred in exercising such jurisdiction under Section 35C of the Act. It is submitted that the power to amend as granted under that Section did not allow the Tribunal to rehear and redecide the matter after an appreciation of the evidence.
5. The decisions of this Court in T.S. Balaram, Income Tax Officer, Company Circle IV, Bombay v. Volkart Brothers, Bombay , Commissioner of Income Tax (CNTL), Ludhiana v. Hero Cycles Pvt. Ltd., Ludhiana and Commissioner of Central Excise, Calcutta v. A.S.C.U. Ltd. have been relied on to contend that the power to amend a mistake was limited to correct an error which did not require investigation either into the law or into the facts.
6. Learned counsel appearing on behalf of the respondent has on the other hand submitted that paragraph 12 of the Original order of the Tribunal clearly showed that although the contention of the respondent was noted by the Tribunal, in disposing of the matter the Tribunal did not address itself to that contention at all. It is submitted that the contention would go to the root of the matter and as such the Tribunal had correctly rectified its earlier omission by the order which has been impugned before us. Learned counsel has referred to several orders passed by this Court in proceedings where this Court has remanded the matter back for reconsideration by the Tribunal when it was pointed out to this Court that the Tribunal had omitted to consider all points. In addition it is submitted that the Tribunal had inherent jurisdiction to rectify such an obvious error since no litigant should suffer by reason of the action of the Tribunal.
7. The power of review is not an inherent power and must be expressly granted. It has not been so granted under the Central Excise Act to the Tribunal. What has been given is a limited power under Section 35C(2) which provides as follows :
"(2) The Appellate tribunal may, at any time within (six months from the date of the order, with a view to rectifying 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 (Commissioner of Central Excise) or the other party to the appeal:
Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.
(2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed." (Emphasis added)
8. Although the ground for rectification, namely, an error on the face of the record may be common to a power for review, the nature of the power to be exercised in the two cases is distinct. The power of review is not limited to rectification and is wider than the power conferred under Section 35C(2). We are unable to hold that the error was a manifest one which could admit of no dispute. It was a debatable point which was raised, and the conclusion of the Tribunal in the impugned order clearly shows that it has considered the question from the point of view of the sufficiency of the material to justify the demand raised. In the circumstances of the case we allow the appeals and set aside the impugned order of the Tribunal. We are told that the respondent has in the meanwhile filed a reference application under Section 35G of the Act before the Tribunal. In view of our order, the Tribunal can now hear and dispose of that application as expeditiously as is conveniently possible. There will be no order as to costs.