TMI Blog2014 (2) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be such which can be established by a long drawn process of reasoning. In the case of T.S. Balram v. M/s. Volkart Brothers (supra), this Court has already decided that power to rectify a mistake should be exercised when the mistake is a patent one and should be quite obvious - mistake cannot be such which can be ascertained by a long drawn process of reasoning - while rectifying a mistake, an erroneous view of law or a debatable point cannot be decided - when the error pointed out is evidently of a disputed nature, the order of rectification being on an arguable issue, we have no hesitation in allowing the appeal filed by the Revenue to that extent - Decided partly in favour of Revenue. - C.M.A. No. 901 of 2008 - - - Dated:- 14-6-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manufacture of their final products. 4. Admittedly, furnace oil was used in the manufacture of both dutiable and exempted final products. As per Rule 6(2) of Cenvat Credit Rules, 2004, as amended by Notification No. 27/2005-C.E. (N.T.), dated 16-5-2005, in order to avail Cenvat credit, separate accounts have to be maintained in respect of inputs used in the manufacture of both dutiable as well as exempted final products. In the absence of maintenance of such separate accounts, as per Rule 6(3)(b) of Cenvat Credit Rules, 2004, the assessee is liable to pay 10% of the sale of price of Slice cleared during the material period. Considering this, show cause notice was issued by the Adjudicating Authority covering the period from 1-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l period. However as regards penalty of Rs. 20,00,000/- imposed on the assessee, the Tribunal held that the mere application of Rule 6(3)(b) should not result in penal action. Thus the Tribunal thought it fit to reduce the penalty from Rs. 20,00,000/- to Rs. 1,00,000/-. Hence, the appeal was partly allowed. Admittedly, the assessee has not challenged this order before this Court. 6. It is seen from the records that the assessee preferred an application for rectification of the mistakes in the order on 31-5-2007, wherein, the assessee specifically pointed out that Rule 6(2) was erroneously applied to the entire period of dispute from 1-10-2004 to 30-9-2005. Rule 6(2) of CCR, 2004 was amended with effect from 16-5-2005 under Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed the assessee s claim holding that the mistake was an apparent mistake. Thus, the Tribunal recalled its order dated 30-4-2007. 8. Thus, by order dated 27-9-2007, the Tribunal considered the claim afresh and passed the final order allowing the assessee s claim. The Tribunal held that the assessee reversed the credit on furnace oil not only corresponding to exempted finished goods, but also on the entire goods manufactured using the common input, namely, furnace oil from 16-5-2005 to 31-8-2005. Thus, on facts, it held that when the entire credit taken was reversed, there was no question of the assessee paying any amount to offset the credit taken. In this, the Tribunal relied on the decision of the Supreme Court reported in 1996 (81) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit on furnace oil, the only option available is Rule 6(3)(b), which does not include the case of reversal at a later date after clearing the goods. 10. It is further pointed out that the assessee availed Cenvat credit on furnace oil, on the goods cleared from October, 2004 to September, 2005 and utilised the same. It revised the credit of Rs. 4,97,596/- in September, 2005 and reported the same in RT-12 return. The actual reversal being only after clearance and in September, 2005, the demand could not be set aside particularly in the rectification proceedings; further the issue on whether the reversal of credit amounted to not taking credit is pending in appeal before the Apex Court against the decision reported in 2006 (203) E.L.T. 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2004 (163) E.L.T. 403 (S.C.) (Commissioner of Central Excise, Vadodara v. Steelco Gujarat Ltd.) on the scope of jurisdiction of the Tribunal on rectification of mistake. In the decision reported in 2011 (270) E.L.T. 625 (S.C.) [RDC Concrete (I) Pvt. Ltd.], the Apex Court pointed out that reappreciation of evidence on a debatable point cannot be said to be rectification of mistake apparent on record. The Apex Court pointed out that if the Tribunal failed to take into consideration something which was not on record, the Tribunal could be said to have committed a mistake apparent on the face of the record. In para 21, it observed : 21. This Court has decided in several cases that s mistake apparent on record must be an obvious and pat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
