Superior Steel Products (P) Ltd. vs Commissioner Of Central Excise, ...
2002 Latest Caselaw 1149 Del

JUDGMENT

1. By this application under Section 35-H of the Central Excise Act, 1944 (for short 'the Act'), the assessed seeks a direction to the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short 'the Tribunal') to state the case and refer the following questions, stated to be one of law, for the opinion of this Court:

1. When the Tribunal is the last fact-finding authority under the Central Excise Law, whether the Tribunal, while passing its final order could refrain to deal with the important facts, documentary evidences, legal propositions, like:

(i) Important grounds taken in the appeal including the one taken in respect of jurisdiction;

(ii) Grounds taken and argued at the time of personal hearing before the Tribunal;

(iii) 17 evidences in the form of cross-examination proceedings, Board's Circulars, Trade Notices, judgments passed by the Courts of law, Office Memorandums of the two Central Government Ministries;

(iv) Various case laws of the courts and the larger bench of the tribunal itself, cited before the Tribunal in support of the applicant's case.

(B) Whether the Tribunal could justify its having ignored the above grounds/evidences/submissions simply on the ground (taken by it for the first time in the rectification order), that since in his order-in-original, the adjudicating authority had already dealt with the relevant issues (though he too had not taken these evidences/grounds into account) the Tribunal need not give finding thereon?

(C) Whether the Tribunal could say that it was not at all necessary to mention all the documents (to be) looked into for the purpose of arriving at the conclusion or that it is not necessary to deal with each and every document by mentioning its name?

(D) Whether the Tribunal could ignore the judgment of the 3 Judges' Bench of the Hon'ble Supreme Court in the case of ITO v. Asoka Textiles Ltd down that the Tribunal (Income Tax Tribunal in that case) had more power (including that of review) than that of a civil court has, because of the usage of different expressions. The Civil Procedure Code (Order 47 Rule 1) uses the expression "an error apparent on the face of the record" while the Income Tax Act, 1922 (Section 35) (pari materia Excise Act, 1944) uses the expression "mistake apparent from the record"? And if it is so is it not required to give finding on each fact/document placed before it?

(E) Whether the grounds taken in the appeal and that too pertaining to natural justice, jurisdiction could be ignored by the Tribunal or brushed aside by it by just simply saying that the authority acted within its jurisdiction?

(F) Whether non-dealing with the documents (in the form of Board's circulars etc) placed before the Tribunal, and non-taking up the grounds taken in appeal before the Tribunal, would amount to a "mistake apparent from the record" in terms ofSection 35C(2) of the Central Excise Act, 1944 ?

(G) If all the above are found to be "mistakes" was it not the duty of the Tribunal to rectify the same ?

(H) Can't rectification of the "mistakes" result into recalling of a final order and passing of a fresh order after giving a re-hearing, irrespective of the fact a re-hearing, irrespective of the fact as to whether after the re-hearing the Tribunal has to change its view taken in the earlier order ?

(I) Can an appellant before the Tribunal be made to suffer for the mistakes committed by the Tribunal ?"

2. Briefly stated, the facts giving rise to the present application are:

3. The applicant, hereinafter referred to as the assessed, is engaged in the manufacture of SS ingots, MS ingots, steel castins, alloy castings etc. On the basis of some information, factory and its managing premises of the assessed company and its Managing Director were searched by the officers of the Excise Department on 4 November 1988. Certain incriminating documents and records were seized. Upon recording of statements of Mr. O.P. Gupta, an employee and Mr. V.K. Leela, Managing Director of the assessed company, and after making enquiries from other Government departments including DESU, the Collector of Central Excise (the adjudicating authority) came to the conclusion that actual purchase of raw material, production and sale of ingots and flats made by the assessed were not correctly reflected in the statutory records maintained by them and in fact only a small portion of such transactions were recorded therein. Holding that the assessed had willfully and deliberately suppressed the transactions and had removed excisable goods clandestinely, evading huge amount of central excise, the adjudicating authority determined the total duty so evaded at Rs. 23,92,805/-. While creating the said demand he also imposed penalty of Rs. 2 lakhs on the assessed. Personal penalties were also levied on the Directors.

4. Aggrieved, the assessed preferred appeal before the Tribunal. Vide its order dated 2 April 1997, the Tribunal upheld the order passed by the adjudicating authority, observing thus:

"We find that looking to the number of heats, electricity consumed, raw material purchased, the deptt. has been able to establish the case beyond reasonable doubt. No doubt in this type of transactions, it is impossible to make out a fool proof case but looking to the facts and circumstances of the case that there was a register which contained information about heats and the admission of the appellants as to the production per heat, the quantity has been calculated. We also not that this production is supported by more consumption of electricity. We find that there is technical literature which shows that for production of ingots and castings of one ton in induction furnace, 650 units of electricity are consumed. Thus, there is reasonable proof on this score also. We also note that the deptt. has been able to show that sufficient raw material was procured by the appellants which was not shown in the records and which was used for clandestine manufacture and clearance of the ingots/castins. We also not that there is evidence collected by the Revenue to show that product was being manufactured clandestinely and removed clandestinely and transactions thereof were being recorded in the private records and the amount received was recorded in the private registers. Having regard to all these facts and circumstances, we hold that the department has been able to make a clear case against the appellants. We find that there is no legal infirmity in the order and that evidence is sufficient to uphold the allegations and that the same has been adequately dealt with the adjudicating authority."

5. Against the said order, the assessed filed an application under Section 35C(2) of the Act seeking rectification of the said order, inter alia, on the grounds that the Tribunal had failed to take into consideration some material documents and the legal plea urged on behalf of the assessed with regard to the jurisdiction of the Collector. By the impugned order the Tribunal has rejected the said application. The Tribunal has observed that while passing the main order, they were fully conscious of the documents relied upon by the assessed and various issues raised before the adjudicating authority and it was not necessary for them to refer to and discuss each and every document. Thus, the Tribunal came to the conclusion that their order did not suffer from any mistake apparent from the record which would be rectified. Hence the present reference application.

6. We have heard learned counsel for the parties.

7. Relying on the decision of the Supreme Court in Standard Radiators Pvt. Ltd. v. Commissioner of Central Excise 2002 (143) ELT 24 (SC), learned counsel for the petitioner would submit that being a final fact-finding authority the Tribunal is required and expected to discuss the facts in detail, which may emanate from the documents placed before it and the adjudicating authority and if it fails to do so, its finding would be vitiated. It is urged that in the present case the assessed had placed before the Tribunal the orders passed by the Sales Tax authorities; by the Additional District Judge in MCA 70/90, exonerating the assessed from the allegation of suppression of production and sales as also theft of electricity. The submission is that the relevant material having been ignored by the Tribunal, its observation that since the same had been considered by the adjudicating authority it was not necessary to re-examine/re-comment, cannot be sustained. It is asserted that the question whether there was an error apparent from the record is a question of law. In support of the argument that in such a situation the order can be said to be suffering from an error apparent from the record, reliance has been placed on a decision of the Supreme Court in Omar Salay Mohamed Sait v. Commissioner of Income-tax, Madras (1959) 37 ITR 151. It is, however, not in dispute that the final order of the Tribunal dated 2 April 1997 has attained finality inasmuch as no reference application has been filed against the said order.

8. Thus, the only question falling for consideration is whether the main order suffered from any error apparent from the record, rectifiable under Section 35-C(2) of the Act ?.

9. The question as to what constitutes an "error apparent from the record" is no longer res integra. A plain meaning of the word "apparent" is that it must be something which appears to be so ex-facie and it is incapable of argument or debate. Explaining the scope of Section 154 of the Income-tax Act, 1961, which is pari materia to Section 35-C(2) of the Act, the Supreme Court in T.S. Balaram, Income-Tax Officer, Company Circle IV, Bombay v. Volkart Brothers and Ors. (1971) 82 ITR 50 held that a mistake apparent from the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning of points on which there may be conceivably two opinions.

10. In Hotz Hotels Pvt. Ltd. v. Commissioner of Income-tax (2001) 248 ITR 647, a Division Bench of this Court, of which one of us (D.K. Jain, J.) was a party, observed thus:

"In order to attract the application of Section 154, the mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. "Mistake" means to take or understand wrongly or inaccurately; to make an error in interpreting; it is an error; a fault, a misunderstanding, a misconception. "Apparent" means visible; capable of being seen, obvious; plain. It means "open to view, visible, evident, appears, appearing as real and true, conspicuous, manifest, obvious, seeming." A mistake which can be rectified under Section 154 is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration."

11. It was further observed that:

"mistake" is an ordinary word but in taxations laws, it has a special significance. It is not an arithmetical error which, after a judicious probe into the record from which it is supposed to emanate is discerned. The word "mistake" is inherently indefinite in scope, as to what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record."

12. As observed by the Supreme Court in Master Construction Co. (P) Ltd. v. The State of Orissa and Anr. (1966) 17 STC 360, an error which is apparent from record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. Similar view has been expressed in a recent decision in Commissioner of Income-tax v. Hero Cycles Pvt. Ltd and Ors. (1997) 228 ITR 463. It has been observed by the Apex Court that for a mistake to be rectified, the condition precedent is that the mistake must be glaring and obvious.

13. In light of the settled legal position on the subject, we feel that the mistakes pointed out by the assessed could not be said to be mistakes apparent from the record and, therefore, the impugned order rejecting the assessed's application for rectification, does not suffer from any infirmity. Having glanced through the final order passed by the Tribunal, we feel that the Tribunal has dealt with the objection raised by the assessed with regard to the jurisdiction of the Collector of Central Excise, the adjudicating authority. True that the Tribunal has not referred to or discussed each and every document, allegedly placed before it by the assessed but from the order we can gather that the Tribunal was fully aware of the issues involved in the matter and has recorded its finding thereon. From a bare reading of the final order we find that there was no mistake apparent from the record, which could be rectified under Section 35-C(2) of the Act. The inaccuracies pointed out in the rectification application cannot be said to be patent mistakes, which constitute the sine qua non for exercise of power under the said Section. In our opinion, the questions proposed deal with conclusions on facts, giving rise to no question of law.

14. For the view we have taken above the decision of the Supreme Court in Omar Salay Mohamed Sait's case (supra), relied upon by learned counsel for the assessed, has no application on the facts of the instant case.

15. For the foregoing reasons, the application begin without merit is dismissed with no order as to costs.