TMI Blog2014 (3) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise of its jurisdiction under Section 35C(2)of the Act to rectify a mistake apparent on the record. Gujarat High Court in Baroda Rayon Corporation Ltd. Vs. Union of India [2005 (10) TMI 104 - HIGH COURT OF GUJARAT AT AHMEDABAD] observed that where the findings of a Tribunal are a result of ignoring the facts on record or failing to consider the averments made in the memorandum of appeal, then such an error is an error apparent on record. In such cases, the Court held that the Tribunal should not feel shy to accept that it had committed an error. Tribunal was correct in exercising its jurisdiction under Section 35C(2) of the Act and correct its mistake by considering the issue of limitation. - Decided against the revenue. - Central Excise Appeal No. 11 of 2007 - - - Dated:- 18-2-2014 - Mohit S. Shah, C.J. And M. S. Sanklecha,JJ. For the Appellant : Mr.Y. S. Bhate with Mr. J. B. Mishra and Ms. Suchitra Kamble For the Respondent : Mr. H. G. Dharmadhikari ORDER PC : This appeal by Revenue under Section 35G of the Central Excise Act, 1944 (`the Act') challenges the order dated 20 December 2005 of the Customs, Excise and Service Tax Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Counsel appearing for the revenue that the challenge in this appeal is to the order dated 20 December 2005 of the Tribunal. The basic issues arising in this appeal is whether or not the exercise of jurisdiction under Section 35C(2) of the Act by the Tribunal to rectify an error is justified or not. We, therefore, take up the appeal for final disposal. 6. Briefly, the facts pertinent to this appeal are as under:- (a) The Respondent-Assessee by appeal challenged the order dated 31 December 2001 passed by the Commissioner of Central Excise before the Tribunal. The order dated 31 December 2001 had, inter alia, confirmed a duty demand of Rs.42.07 lakhs attributable to appropriate classification of transmission Belts. Besides, imposing an equivalent penalty under Section 11AC of the Act; (b) By a final order dated 1 September 2004 passed under Section 35C of the Act, the Tribunal inter alia, upheld the duty demand of Rs.42.07 lakhs. However, while upholding the duty demand of Rs.42.07 lakhs, the order dated 1 September 2004 reduced the penalty imposed under Section 11AC of the Act from Rs.42.07 lakhs to Rs.6.00 lakhs; (c) On 27 December 2004, the Respondent-Assessee file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for rectification is made within 4 years by a party, the Tribunal can pass an order on such an application even beyond a period of 4 years. The relevant observation of the Apex Court in Sree Ayyanar (supra) reads as under:- 8 In the light of the above controversy, we set out herein below provisions of Section 254(2) of the 1963 Act which read as follows:- The Appellate Tribunal, may at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any other passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. 9. Analyzing the above provisions, we are of the view that Section 254(2) is in two parts. Under the first part, the Appellate Tribunal may, at any time, within four years from the date of the order, rectify any mistake apparent from the record and amend any order passed by it under sub-section (1). Under the second part of Section 254(2) reference is to the amendment of the order passed by the Tribunal under section (1) when the mistake is brought to its notice by the assessee or the Assessing Officer. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egative i.e. in favour of the revenue and against the respondent-assessee. (b) Per contra, Mr. Dharmadhikari, learned counsel for the Respondent-Assessee points out that the impugned order dated 20 December 2005 was in the exercise of its jurisdiction to rectify errors apparent on record under Section 35C(2) of the Act. It is pointed out that when the appeal before the Tribunal was heard on 18 August 2004 prior to passing the order dated 1 September 2004, they had filed a synopsis and had specifically argued/ submitted that the demand to the extent of Rs.37.06 lakhs is barred by limitation so far as classification of transmission belts is concerned. However, in the order dated 1 September 2004, the Tribunal did not consider the issue of limitation and consequently gave no finding on it. Therefore, they were justified in filing an application for rectification of error apparent on record. Moreover, it is submitted that the issue of demand being barred by limitation on account of approved classification was not a debatable issue but error apparent on the face of it. Therefore, the exercise of jurisdiction by the Tribunal leading to the impugned order dated 1 September 2004 under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e synopsis, it is urged that the demand to the extent of Rs.12.68 lakhs and Rs.24.38 lakhs aggregating to Rs.37.06 lakhs are time barred. This was entirely on the ground that classification lists were approved earlier as well as the fact that the Commissioner has given no finding of suppression on the classification issue to warrant invoking the extended period of limitation. On a close perusal of the order dated 1 September 2004 of the Tribunal, we find that the issue of limitation has not been adverted to at all by the Tribunal. The issue of limitation as pointed out in the application for rectification of the Respondent-Assessee was urged during the hearing before the Tribunal but the same was not dealt with in its order dated 1 September 2004. This non-consideration of an issue urged before the Tribunal but not dealt with by it would give rise to a mistake apparent from the record. 11. The Apex Court in Honda Siel Power Products Ltd. (supra) while dealing with the powers of rectification of the Tribunal under Income Tax Act, has held that the purpose behind allowing the rectifications of mistakes is a fundamental principle that no party appearing before the Tribunal should s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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