TMI Blog2019 (3) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... would have the jurisdiction to correct the said mistake. It is not merely an arithmetical or clerical mistake that can be rectified because mistake in taxation laws has a different connotation and is mostly subjective. The mistake should be such which no Court would permit it to remain on the record for rectification of the order stems from the fundamental principle that justice is above all. If a decision is based solely on a material which is irrelevant or could not have been used then the mistake can be rectified. When it has been brought to the notice of the Tribunal that an issue was framed by the Commissioner of Customs (Preventive), Jodhpur as to whether the Commissioner of Customs (Preventive) had the jurisdiction to issue the show cause notice and a detailed finding has been recorded that it had the jurisdiction, then it would be a fit case for exercise of powers under Section 129B(2) of the Act to rectify the mistake committed by Tribunal, which mistake is so apparent on the face of the record. The Appeals were disposed of earlier on 11 August, 2017 by remanding the matter to the adjudicating authority for taking a fresh decision as the parties had agreed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not be finalized by enhancing the declared assessable value by ₹ 3,21,06,615/- and as to why customs duty amounting to ₹ 1,63,10,160/- short paid on the said amount should not be recovered from them, was not the competent authority to issue the notice in view of the decision of the Delhi High Court in Mangali Impex Ltd. vs Union of India, reported in 2016 (335) ELT 605 (Del.). In this connection, the Tribunal also noticed its earlier decision rendered on 12 June, 2017 (Final Order No. 53941-53942 of 2017), wherein the matter was remanded to the Adjudicating Authority to first decide the issue of jurisdiction, after the decision of the Supreme Court in Mangali Impex Ltd. It is for this reason that the Tribunal disposed of all the six appeals on 11 August, 2017 by remanding the matter to the Adjudicating Authority for taking a fresh decision. 3. The rectification applications have been filed alleging that a mistake apparent from the record had occurred which needs to be rectified. It is pointed out that the Commissioner of Customs (Preventive), Jodhpur, had the jurisdiction to issue the notice and, in fact, this issue had been elaborately dealt with by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Preventive), Jodhpur did not have the jurisdiction to issue the notice but this issue was not decided by the Rajasthan High Court and so the decision of the Rajasthan High Court will have no impact in the Appeals filed before the Tribunal. Learned Consultant also pointed out that after the Final Orders were passed, the Department refunded the pre-deposit amount in five out of the six Appeals that had been filed and, therefore, the Department cannot be permitted to file any application for rectification of mistake. 6. In order to appreciate the contentions advanced by the parties, it would first be appropriate to reproduce Section 129B(2) of the Act which confers power on the Appellate Tribunal to rectify any mistake apparent from the record and the same is reproduced below : 129B(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 Principal Commissioner of Customs or Commissioner of Customs or the other party to appeal. Provided that an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indefinite in scope, as to what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under Section 22, it is not sufficient if there is merely a mistake in the order sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record. The plain meaning of the word apparent is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectifications. [emphasis supplied] 9. In Asstt. Commr., Income Tax, Rajkot vs Saurashtra Kutch Stock Exchange Ltd., reported in 2008 (230) ELT 385 (SC), the Supreme Court held that non-consideration of a decision of a High Court or the Supreme Court can be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C). The Supreme Court examined the scope of Section 154 of the Income Tax Act, 1961, which also provides for rectification of any mistake apparent from the record by any Income Tax Authority. In the rectification application filed by the assessee before the Income Tax Tribunal, it was pointed out that the earlier judgment of the Co-ordinate Bench had escaped the attention. The Supreme Court pointed out that the purpose behind the enactment of Section 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal and this fundamental principle has nothing to do with the inherent powers of the Tribunal. The Supreme Court observed that one of the important reasons for giving power of rectification to the Tribunal is to see that no prejudice is caused to the parties by its decision based on a mistake apparent from the record. The Supreme Court also pointed out that Rule of precedent is an important aspect of legal certainty which is not obliterated by section 254(2). It, therefore, held that the Tribunal was justified in exercising its powers when it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady on record. The Tribunal has acknowledged its mistake, it has accordingly rectified its order. In our view, the High Court was not justified in interfering with the said order. We are not going by the doctrine or concept of inherent power. We are simply proceeding on the basis that if prejudice had resulted to the party, which prejudice is attributable to the Tribunal s mistake, error or omission and which error is a manifest error then the Tribunal would be justified in rectifying its mistake, which had been done in the present case. [emphasis supplied] The Supreme Court in Commissioner of Central Excise, Calcutta vs A.S.C.U. Ltd., reported in 2003 (151) ELT 481 (SC), in connection with the provisions of Section 35C(2) of the Central Excise Act, 1944, which also confers power on the Appellate Tribunal to rectify any mistake apparent from the record, observed that the scope of correction which can be made by the Tribunal is limited. It observed that if a decision is passed solely on a material which is irrelevant or which could not have been used, then it can be said that there is a mistake apparent from the record, but if a decision is based on more than one mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel for the Appellants has, however, submitted that the contents of the Application filed for rectification of the Order do not constitute a mistake apparent from the record and, in fact, the Application seeks a review of the Final Order after re-appreciation of the contentions. It is his submission that a mistake must be apparent on the face of the record and should not be one which is established by long drawn process of reasoning or where two opinions are possible. In support of his contention, he placed reliance upon the decision of the Supreme Court in Commissioner of Central Excise, Belapur, Mumbai vs RDC Concrete (India) P. Ltd., reported in 2011 (270) ELT 625 (SC), and in particular on paragraphs 16 and 21, which are reproduced below : 16. Upon perusal of both the orders viz. earlier order dated 4th November, 2008 and order dated 23rd November, 2009 passed in pursuance of the rectification application, we are of the view that the CESTAT exceeded its powers given to it under the provisions of Section 35C(2) of the Act. This Court has already laid down law in the case of T.S. Balram v. M/s. Volkart Brothers, 82 ITR 50 to the effect that a mistake a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation must be such an error which may strike one on a mere looking at the record and does not require any long drawn process of reasoning. 13. It is no doubt true that evidence cannot be re-appreciated to come to a different conclusion and that mistake apparent from the record cannot be something which is established by a long drawn process of reasoning of points on which there may conceivably be two opinions, but it is equally true that the purpose behind the enactment of Section 129B(2) of the Act is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal and that if a decision is based on a material which could not have been used, then the Tribunal would have the power to rectify the mistake. This apart, if the Tribunal has not considered the material evidence which was available on the record, it would amount to a mistake apparent on the face of the record and the Tribunal would have the jurisdiction to correct the said mistake. It is not merely an arithmetical or clerical mistake that can be rectified because mistake in taxation laws has a diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice had been issued by an Authority which had no jurisdiction to issue such a notice or the notice had been issued under a wrong provision of law or on the grounds of malafide. The Court found that the grounds on which the show cause notice had been challenged could not be established and substantiated and nor did the show cause notice suffer from any lack of authority or any error of jurisdiction. The Court also expressed its concern that the writ petitioner had obtained the interim order by misleading the Court that the notice issued under Section 28 of the Act had not been served before the demand was made as there was no question of issue of any show cause notice under Section 28 at that time when the final assessment had not been made and the Writ Petition, because of this argument, was allowed to remain pending for a long period of eight years during which the final assessment could not be made. The Writ Petition was dismissed with costs of ₹ 1,00,000/-. Paragraphs 17, 18 and 19 of the judgment of the High Court dismissing the Writ Petition with costs are reproduced below : 17. The writ petition was filed against a notice to show cause, as to why a final ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid reasons, the writ petition is dismissed, with costs quantified at ₹ 1 lac. We do not propose to make any orders with regard to fixing the time limit for giving reply to the show cause notice and for the assessment proceedings, as we have no doubt that the department will comply with the procedural provisions before any final assessment is made, and that, the petitioner will be at liberty to approach this Court, after availing the appellate remedies, in accordance with law. 16. This decision of the Rajasthan High Court was an important material which was required to be brought to the notice of the Bench at the time of hearing of the Appeal when the Final Order was passed, but it was not placed and an attempt was made to persuade the Court to remand the matter to the Adjudicating Authority as in some cases the matters were remanded in view of the decision of the Delhi High Court in Mangali Impex . As noticed above, the factual position in this appeal is entirely different. 17. What also needs to be noticed is that the Delhi High Court on 10 August, 2018 disposed of four Appeals filed by the Revenue against a similar Final Order passed by the Tribunal remand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als on record, this Court is of the opinion that an identical approach is necessary in these cases. Accordingly, following the order in Forech India (supra), these appeals are allowed and the CESTAT would independently apply its mind to the question of jurisdiction and also decide the appeal on merits including the aspect of imposition of penalty if any. The appeals are allowed in part in the above terms. 18. It is, therefore, not possible to accept the contention of the learned counsel for the Appellant that the Application, in effect, seeks review of the earlier Final Order passed by the Tribunal. The Application, on the other hand, seeks to rectify the mistake apparent from the record committed by the Tribunal in view of the agreement between the parties. 19. As noticed above, the Appeals were disposed of earlier on 11 August, 2017 by remanding the matter to the adjudicating authority for taking a fresh decision as the parties had agreed that the Commissioner of Customs (Preventive), Jodhpur was not the competent authority to issue notice. To rectify this mistake of the Tribunal, the entire order dated 11 August, 2017 would have to be recalled. It can be urged that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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