2005 (4) TMI 81 - HC - Central Excise

Rectification of mistake - Counsel - manufacture of medicines - demand on physicians samples - HELD THAT - The case of the petitioner is more sound considering the fact that the decision of the Apex Court in Union of India v. Suhrid Geigy Ltd. 1996 (4) TMI 137 - SUPREME COURT had already been pronounced on the day when the Tribunal decided the appeal but due to inadvertence only the decision of the High Court had been pointed out and the petitioner invited attention to the decision of the Apex Court at a subsequent stage only because the decision was published later in point of time. The Tribunal could not have overlooked the settled legal position and was bound to carry out the rectification considering the ratio of the decision of the jurisdictional High Court as well as the Apex Court. The second reason advanced by the Tribunal is no reason at all. The Tribunal should not lose sight of the fact that matter cannot be decided on the basis of personalities appearing before it. If the Tribunal had omitted to take into consideration the issues/grounds raised before it it was of no consequence as to whether the original appeal was conducted by one representative and the petitioner was represented by another person in rectification proceedings. The reason assigned by the Tribunal can only be a ground for rejecting an application in case any fact or averment which is relatable to personal knowledge of the representative is averred in the rectification proceedings. The present is not such a case. The petitioner through its representative had merely invited attention of the Tribunal to the fact that it had failed to render any decision on merits of the controversy between the parties. The Tribunal could not have shut out the case of the petitioner on flimsy ground that the representative before it in rectification proceedings did not take part in earlier proceedings. In the result impugned order dated 30th September 2004 (Annexure-K) is hereby quashed and set aside. The Tribunal shall take up for consideration the Rectification of Mistake application moved by the petitioner before it and decide the controversy after giving adequate opportunity of hearing to both the sides bearing in mind the settled legal position. The parties are directed to approach the Tribunal on 25th April 2005 when the Tribunal shall fix up a date of hearing of the rectification application. The petition is accordingly allowed to the aforesaid extent. Rule made absolute. There shall be no order as to costs.

Summary

Issues involved:
Challenge to Tribunal's Final Order and Miscellaneous order regarding levy of duty on physicians' samples of medicines, rejection of rectification application by Tribunal, consideration of Apex Court's decision by Tribunal in rectification proceedings.

Analysis:

Issue 1: Challenge to Tribunal's Final Order
The petitioner, a Limited Company engaged in the manufacture of medicines, challenged the Tribunal's Final Order confirming the demand of duty on physicians' samples of medicines. The Tribunal's decision was based on show cause notices issued by the Additional Collector. The petitioner contended that the Tribunal should have adjudicated the matter in their favor as the High Court had already ruled in their favor on the same issue. The petitioner sought rectification of the Tribunal's decision based on the subsequent confirmation of the High Court's decision by the Apex Court. The Tribunal rejected the rectification application, leading to the current challenge before the High Court.

Issue 2: Rejection of Rectification Application by Tribunal
The Tribunal rejected the petitioner's rectification application citing reasons such as the decision of a Larger Bench that a subsequent order is not a ground for reopening concluded proceedings, and the absence of the representative who participated in the rectification proceedings from the earlier proceedings. The High Court emphasized the legal position that the decision of the Apex Court or the jurisdictional High Court is binding and must be considered by the Tribunal. The High Court criticized the Tribunal for overlooking the settled legal position and failing to rectify the mistake in light of the Apex Court's decision, which was available at the time of the Tribunal's decision.

Issue 3: Consideration of Apex Court's Decision by Tribunal
The High Court reiterated the legal principle that a decision of the Apex Court or the jurisdictional High Court is binding and must be considered by the Tribunal. The High Court emphasized that the Tribunal should have taken into account the Apex Court's decision, which was brought to its attention during the rectification proceedings. The High Court criticized the Tribunal for disregarding the settled legal position and failing to rectify the mistake based on the Apex Court's decision, which was available before the Tribunal's decision but was pointed out by the petitioner at a later stage due to publication timing. The High Court held that the Tribunal's reasoning for rejecting the rectification application based on the absence of the representative from earlier proceedings was unfounded and emphasized that the Tribunal must consider all relevant issues raised before it, regardless of the representatives involved.

In conclusion, the High Court quashed the Tribunal's order and directed the Tribunal to consider the rectification application, giving both parties a fair opportunity to present their case in light of the settled legal position regarding the consideration of decisions by the Apex Court and jurisdictional High Court. The parties were instructed to appear before the Tribunal for further proceedings, and the petition was allowed without costs.