2019 (5) TMI 1747 - AT - Service Tax

Rectification of mistake - error apparent on the face of record - review of order - applicability of rate of duty in respect of ongoing works contracts - HELD THAT - The Hon ble Supreme Court in DEVA METAL POWDERS PVT. LTD. VERSUS COMMISSIONER TRADE TAX UP. 2007 (12) TMI 221 - SUPREME COURT has held that power to rectify mistake does not cover cases where a revision or review of the order is intended. A mistake which can be rectified is the one which is patent and is obvious and whose discovery is not dependent on argument or elaboration. Rectification of an order does not mean obliteration of order originally passed and its substitution by a new order. Where an error is far from self evident and is not confined to clerical or arithmetical mistake it ceases to be an error apparent on records. What the appellant is seeking in the present case is the reversal of the conclusion already arrived at by the Tribunal which can be changed only by long drawn process of argument by both the sides. As such it cannot be said that the error pointed out by the learned Advocate is an error apparent on the face of the records. It was not a mistake on the part of the Bench but it was a mistake on the part of the litigant for which there is no scope of any rectification provided under the Act - ROM Application rejected.

Summary

Issues:
Rectification of mistake application regarding the rate of tax on works contract.

Analysis:
The appellant filed a rectification of mistake application concerning the rate of tax leviable on works contracts as per the Tribunal's final order. The appellant argued that the rate of tax was increased from 2% to 4% in March 2008 but contended that ongoing contracts under the composite scheme should not be subject to the higher rate. The appellant cited a decision from the Calcutta High Court to support this argument, claiming that failure to present this decision to the Bench was a valid reason for rectification.

The Revenue's representative opposed the application, stating that it was an attempt to review the order under the guise of rectification, which is impermissible. The Tribunal reviewed the relevant paragraph from the order, emphasizing that ongoing works contracts should attract the higher rate of duty from 1.3.2008. The Tribunal rejected the appellant's argument regarding the Calcutta High Court decision, stating that its applicability needed to be argued before the Bench.

Additionally, the Tribunal referenced a decision by the Larger Bench on the impermissibility of reviewing an appeal under the guise of rectification. They also cited a Supreme Court decision that rectification should only address patent errors, not substantive legal arguments. The Tribunal noted that the appellant failed to present the Calcutta High Court decision during the original proceedings, indicating that the mistake was on the litigant's part, not the Bench's, and therefore not subject to rectification.

In conclusion, the Tribunal rejected the rectification of mistake application, emphasizing that rectification is not intended for revising or reviewing orders but for correcting patent errors. The failure to present crucial legal decisions during the original proceedings precluded rectification in this case.