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TMI Blog2005 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Commission, a Commission constituted by a notification issued under Section 32 of the Central Excise Act, 1944 ("Excise Act" for short) for settlement of cases under the Customs and Central Excise. 3. The petitioner applied for and obtained Export Promotion Capital Goods Licence ("EPCG Licence" for short) dated 26th May, 1997 from the Director General of Foreign Trade ("DGFT" for short). This licence permitted the petitioner to import capital goods worth Rs. 8,06,23,847/-. The petitioner, however, imported capital goods worth Rs. 6,70,96,822/- only. Under the EPCG Scheme the petitioner was required to export 4 times the value of the capital goods imported against the EPCG Licence. The petitioner imported various capital goods availing the benefit of Notification No. 28/97-Cus. to the extent of the total duty payable in the sum of Rs. 1,73,33,363/- (Basic Customs Duty Rs. 66,94,272/- + CVD Rs. 1,06,39,081/-). The petitioner could not fulfil export obligation imposed on it. Due to failure on the part of the petitioner to fulfil export obligation, the petitioner paid Rs. 1,73,21,127/- voluntarily on 30th March, 2000 being the duty foregone by them at the time of import. Consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh. Accordingly, the petitioner contended that no financial accommodation accrued to it and there was no loss of revenue to the Government in non-payment of additional duty of customs (CVD). 7. The Settlement Commission passed final order on 26th February, 2002 disposing of the three applications filed by the petitioner and granted all immunities sought for by the petitioner. The Settlement Commission was pleased to grant partial waiver of interest and directed the petitioner to pay interest at the rate of 10% per annum on the duty saved, comprising of both basic customs duty as well as additional duty of customs (CVD). 8. The petitioner after having gone through the aforesaid order entertained a belief that the Settlement Commission did not deal with its submission that no penalty was leviable on the CVD since the same was available as Modvat credit and no financial accommodation was accrued to the petitioner. As such the petitioner vide its application dated 18th April, 2002 requested the Settlement Commission to rectify the mistake and pass an appropriate order. The Settlement Commission after considering the said application passed order dated 10th June, 2004 holding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by itself. 12. Mr. Shah, learned Counsel for the petitioner placed reliance on the judgment of the Apex Court in the case of Grindlays Bank Ltd. v. Industrial Tribunal, 1980 (Supp) SCC 420; wherein the Apex Court considered the question as to whether the Tribunal constituted under the provisions of the Industrial Disputes Act has a power to set aside an ex parte order in absence of express provision in the Act or the Rules framed thereunder. The Apex Court held that the Tribunal should be considered to be endowed with such ancillary or incidental powers as are necessary to discharge its functions effectively for the purpose of doing justice between the parties. The Apex Court, even though found that there was no express provision giving the Tribunal jurisdiction to set aside its ex parte award, held that the Tribunal should be considered as invested with such incidental or ancillary powers. 13. Mr. Shah also relied upon the judgment of the Gujarat High Court in the case of Ram Kirpal v. Union of India, 1998 (103) E.L.T. 8 (Guj.); wherein the judgment of the Apex Court in the case of Grindlays Bank (supra) was followed. The Gujarat High Court also quoted extensively from the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he limited and narrow ground developed by the Privy Council and the House of Lords. The Court approved the principle laid down by the Privy Council in Rajunder Narain Rao v. Bijai Govind Singh 1 Moo PC 117 that an order made by the Court was final and could not be altered. Nevertheless, if by misprision in embodying the judgments, errors have been introduced, these Courts possess by Common law, the same power which the Courts of record and statute have of rectifying mistakes made in drawing up its own judgments, and this Court must possess the same authority. The Lords have however gone a step further, and have corrected mistake introduced through inadvertence in the details of judgments; or have supplied manifest defects in order to enable the decrees to be enforced; or have added explanatory matter, or have reconciled inconsistencies." The basis for exercise of power was stated in the said judgment as under : "It is impossible to doubt that the indulgence extended in such cases is mainly owing to the natural desire prevailing to prevent irremediable injustice being done by a court of last resort, where by some accident, without any blame, the party has not been heard and an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omissions/slips/errors committed by itself to the prejudice of the party, even in the absence of express provision in that behalf. 15. Mr. Shah, learned Counsel for the petitioner, taking this Court through the judgment of the Apex Court in the case of Grindlays Bank (supra) urged that the expression "review" is used in two distinct senses, namely, (i) procedural review and (ii) review on merits. In procedural review the error can be corrected while in review on merits, however, no review lies on merits unless a statute specifically provides for it. Mr. Shah pressed into service Para 13 of the judgment in the case of Grindlays Bank; wherein the scope of the term "review" was examined by the Apex Court in the following words : "The expression "review" is used in two distinct senses, namely (1) a procedural review which is either inherent or implied in a Court or Tribunal to set aside a palpably erroneous order passed under a misapprehension by it, and (2) a review on merits when the error sought to be corrected is one of law and is apparent on the face of the record. It is in the latter sense that the court in Patel Narshi Thackershi case held that no review lies on merits unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation of financial accommodation which could be said to have been accrued to the petitioner. As such, according to Mr. Shah, no interest could have been ordered by the Settlement Commission in its final order dated 26th February, 2002. Mr. Shah, without prejudice to his earlier submissions, thus, submits that the said order to the extent it awards interest on the CVD is liable to be quashed and set aside even though order dated 21st June 2004 rejecting application for rectification is held to be legal and proper. 17. Mr. Shah, learned Counsel for the petitioner further submitted that, in fact, the Settlement Commission has passed orders in as many as in four cases holding that no interest is leviable on the additional customs duty (CVD) since the same is available as Modvat credit to the importer. In all these four cases, according to Mr. Shah, the Settlement Commission has levied interest on the basic customs duty saved by the importer. He placed reliance on such four orders of the Settlement Commission, viz., (i) order dated 7th November, 2003 in the case of Allied Asia Gears Ltd.; (ii) order dated 30th October, 2003 in the case of CG Glass Ltd., (iii) order dated 13th Sept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was rightly rejected by the Settlement Commission vide its order dated 21st June, 2004. Mr. Jetly submits that the submission of the petitioner that the point regarding charging of interest on CVD, which was raised, argued, noted but not considered, is not at all correct since the Settlement Commission in its order dated 21st June, 2004 in Para 5 has recorded specific finding observing that there was no accidental slip or inadvertant error as such no interference with the said order is warranted in exercise of writ jurisdiction of this Court. 21. According to Mr. Jetly, in the final order dated 26th February, 2005 the Settlement Commission has squarely dealt with the issue in Para 4 of the operative part of the order and after taking due note of the submissions made, and upon consideration of the facts of the case, the Settlement Commission has ordered that interest at the rate of 10% instead of 24% per annum as per Notification No. 28/97-Cus. should be paid by the petitioner. Hence, in the submission of Mr. Jetly, there is no mistake or error on the part of the Settlement Commission. Mr. Jetly, however, submits that the question whether or not the Settlement Commission has inh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Bom.) to which one of us is party (Daga, J.). He further submits that the said decision found favour with the Apex Court as such this Court should not examine the merits of the impugned order. 24. Mr. Jetly also urged that although ground for rectification, namely, an error on the face of record may be common to a power for review, however, the nature of power to be exercised in two cases is distinct. He placed reliance on the decision of the Apex Court in the case of Commissioner of Central Excise, Vadodara v. Steelco Gujarat Ltd., 2004 (163) E.L.T. 403 (S.C.) and pressed into service para 8 of the said order reading as under : "Although the ground for rectification, namely, an error on the face of the record may be common to a power for review, the nature of the power to be exercised in the two cases is distinct. The power of review is not limited to rectification and is wider than the power conferred under Section 35C(2). We are unable to hold that the error was a manifest one which could admit of no dispute. It was a debatable point which was raised, and the conclusion of the Tribunal in the impugned order clearly shows that it has considered the question from the point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant has not enjoyed any financial accommodation by belated payment of CVD. CVD is nothing but taking from one hand and giving back to an assessee from another hand. In case the CVD was paid by the applicant at the time of importation, that amount would have become available to the applicant immediately thereafter in the form of Modvat credit which the applicant could have utilised without any fetter. That very amount has been paid late and thus, the applicant would get Modvat credit also late and thus in our considered view belated payment of CVD is not a situation of financial accommodation which accrued to the applicant. We grant immunity to the applicant from payment of interest in excess of 10% so far as on basic Customs duty is concerned. This means that the applicant shall pay interest @ 10% p.a. on the basic Customs duty from the date of importation when the duty became payable till the date the duty was actually paid by the applicant......." 29. The learned Counsel for the petitioner also cited other judgments of the Settlement Commission; wherein identical orders were passed by it holding that no interest was leviable on the CVD component on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reasons will put the authority on the alert and minimise the chances of unconscious infiltration of personal bias or unfairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by the reasonable man and will discard irrelevant or extraneous considerations. Second, it is a well-known principle the justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi-judicial authorities to this court by special leave granted under Article 136. A judgment which does not disclose the reasons will be of little assistance to the Court." 33. In the above view of the matter, we quash and set aside the final order dated 26th February 2002 passed by the Settlement Commission to the extent it grants interest at the rate of 10% per annum on the additional duty of customs (CVD) and remit the matter back to the Settlement Commission for consideration afresh following pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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