2005 (98) ECC 446 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri P.G. Chacko, Member (J) and Shri Jeet Ram Kait, Member (T)

Seshasayee Paper and Paper Boards Ltd.

Versus

Collector of Central Excise, Coimbatore

Application No. E/ROM/138/02 in Appeal No. E/364/89-MAS

[Arising out of Order-in-Appeal No. 44/88 (CBE) dt. 29.6.88 passed by the Collector of Central Excise (Appeals), Madras]

Misc. Order No. 551/2004, dt. 24.9.2004, Certified on 30.9.2004

Review

Tribunal has no power of review and has only the power to rectify its order -- The latter power being narrower in scope -- This would mean that the Tribunal cannot review its order even in the guise of rectifying it.

[Para 10]

Final Order

Review -- The finality of a Final Order passed by the Tribunal should not be allowed to be disturbed by reagitation of settled issued through review applications -- As it is subject only to the provisions of Section 35G or Section 35L of Central Excise Act, 1944 -- Held, while exercising the power of rectification of mistake, Tribunal must bear in mind the provisions of Section 35C(4) of the Act.

[Para 11]

Final Order

The finality of Final Order cannot be allowed to be shaken by a party saying that the order is contrary to a later decision of the Tribunal -- It is impossible for the Tribunal to follow a non-existing case law -- The Bench at a loss to understand as to how any mistake (let alone "mistake apparent from the record" can be found in the impossible -- After all, impotentia excusat legem'

[Para 11]

Application is dismissed

PRESENT :

Shri V. Sridharan Adv, for the applicants.

Smt. R. Bhagya Devi, SDR for the respondent.

Cases Cited :

1. Andhra Pradesh Paper Mills Ltd. v. CCE, 1990 (29) ECC 139 (T).................. [Paras 2, 7]

2. ACCE v. Ramakrishnan Kulwant Rai, 1989 (21) ECC 186 (SC).......................... [Para 5]

3. B.V.K. Seshavataram v. CIT, 1994 (210) ITR 633 (AP)..................................... [Para 4]

4. CCE, Calcutta v. A.S.C.U. Ltd., 2003 (90) ECC 438 (SC).................................. [Para 8]

5. DOKKA Samuel v. Dr. Jacob Lazarus Chelly, 1997 (4) SCC 478........................ [Para 8]

6. Gujarat State Fertilisers & Chem. Ltd. v. CCE Vadodara, 2000 (122) ELT 282 (T-LB) [Para 4]

7. HAJI J.A. Kareem Sait v. DCTO, Mettupalayam, 18 STC 370............................ [Para 7]

8. K.G. Khosla Compressors Ltd. v. CCE, New Delhi, 1998 (97) ELT 303 (Tri)........ [Para 4]

9. Mira Silk Mills v. CCE, Mumbai, 2003 (153) ELT 686........................................ [Para 8]

10. Mst. Jamna Kuer v. Lal Bahadur, AIR FC 131 1950......................................... [Para 6]

11. S.A.L. Narayana Row, CIT v. Model Mills Nagpur 1967 (64) ITR 67................... [Para 4]

12. Shree Palaniappa Transports v. CIT, 1999 (238) ITR 492 (Mad)........................ [Para 8]

13. Straw Product Ltd. v. CCE & C, 1992 (59) ELT 572 (Tri).................................. [Para 3]

14. V-Guard Indus. Ltd. v. CTO, Coimbatore, 2003 (158) ELT 806 (Mad)................ [Para 4]

Per : P.G. Chacko

In this application, the appellants in the captioned appeal are seeking "rectification" of what they consider as "mistake apparent from the record" in Final Order No. 644/1991 dated 25.11.91 passed by this Bench in the said appeal.

2. The appellants were engaged in the manufacture of paper and paper board and paying duty thereon by availing Modvat credit on inputs. During the period of dispute, they took Modvat credit on Felts and Wires treating the same as inputs under Rule 57A of the Central Excise Rules, 1944. The original authority disallowed this credit, holding that Wires and Felts were in the nature of equipments forming parts of paper-making machinery. The appeal preferred by the party to the Collector (Appeals) did not succeed. Hence, the captioned appeal was filed and the same was disposed of by this Bench as per Final Order No. 644/91 ibid, wherein the earlier decision of this Bench-in the case of Andhra Pradesh Paper Mills Ltd. v. CCE, 1990 (29) ECC 139 (T) : 1990 (50) ELT 252 was followed and accordingly it was held that the Felts and Wires of the appellants were, essentially, parts of their paper-making machinery and the items could only be considered to have been used in relation to the machinery and could not be held to have been used in, or in relation to, the manufacture of paper. The appellants' claim for the benefit of input duty credit in respect of Felts and Wires was thus rejected. The Final Order noted, inter alia, that the appellants' counsel had fairly conceded that their case was covered against them by the Tribunal's decision rendered in the case of Andhra Pradesh Paper Mills Ltd. (supra).

3. In the present application, it is stated that, in the case of Straw Products Ltd. v. CCE & C, 1992 (59) ELT 572 (Tri), Felt and Wire netting of stainless steel and phosphor bronze used by M/s. Straw Products Ltd. (manufacturers of paper) were held to be eligible inputs for Modvat credit under Rule 57A. It was held, in that case, that the said items were used in, or in relation to, the manufacture of paper rather than in relation to the paper-making machinery. It is, therefore, submitted that the denial of input duty credit to the wires and felts of the appellants in the instant case was a mistake apparent from the record, which is sought to be rectified.

4. We have heard both sides and considered their submissions. The gist of arguments of Shri V. Sridharan, Ld. Counsel for the appellants, is that any view taken by this Tribunal in a Final Order could be "corrected" on the basis of a subsequent contra decision of the Tribunal, or of any High Court, or the Supreme Court. This point was sought to be buttressed on the strength of the decision of the Andhra Pradesh High Court in the case of B.V.K. Seshavataram v. Commissioner of Income Tax, 1994 (210) ITR 633 (AP). Ld. Counsel also referred to the Supreme Court's judgment in S.A.L. Narayana Row, CIT v. Model Mills Nagpur Ltd., 1967 (64) ITR 67, which was followed by the A.P. High Court in Seshavataram's case. He also relied on the Madras High Court's judgment in V-Guard Industries Ltd. v. CTO, Coimbatore, 2003 (158) ELT 806 (Mad). Further, Counsel also pointed out that, in the case of K.G. Khosla Compressors Ltd. v. CCE, New Delhi, 1998 (97) ELT 303 (Tri), a learned Member of the Tribunal, sitting single, recalled a Final Order after noting that a view contradictory to the view taken in the Final Order was subsequently taken by a Larger Bench. Ld. Counsel also sought to draw support from the minority view taken in the judgment of the Tribunal's Larger Bench in Gujarat State Fertilisers & Chem. Ltd. v. CCE, Vadodara, 2000 (122) ELT 282 (T-LB). It was argued that the majority view taken in Gujarat State Fertilisers & Chem. (supra) to the effect that a subsequent decision of the Tribunal or any High Court or the Supreme Court was no ground for rectification of an earlier Final Order of the Tribunal, was not correct as it was contra to the decisions of the Andhra Pradesh and Madras High Courts (supra).

5. Ld. SDR, on the other hand, heavily relied on the majority view taken by the Tribunal's Larger Bench in Gujarat State Fertilizers & Chemicals (supra) and argued that any Final Order passed by the Tribunal was not liable to be rectified on the basis of any subsequent judicial pronouncement in the interest of finality of decision. The subsequent decision of the Tribunal in Straw Products (supra) was not there when this Bench passed the Final Order ibid. It was not a part of the record of the appeal. Hence, no "mistake apparent from the record" could be pointed out with reference to the subsequent decision in Straw Products (supra), in the Final Order. It was, further, argued that the case law on Income tax/Sales tax law provisions, cited by Ld. Counsel, could not be applied to Central Excise law provisions. The present application, according to Ld. SDR, was an appeal in disguise, which was not permissible under Section 35C(2) of the Central Excise Act. The only remedy available to the appellants, if aggrieved by the above Final Order, was an appeal to the higher appellate forum and not an application for rectification of mistake. Ld. DR further pointed out that, in this case, the appellants' Counsel had, at the hearing stage, conceded that their case was covered against them by the Tribunal's decision in Andhra Pradesh Paper Mills (supra). The Final Order passed on the basis of such concession was not open for rectification of mistake at the instance of the appellants, SDR argued.

6. In his rejoinder, Ld. Counsel argued that this application was in no way affected by the Counsel's concession, at the hearing of the appeal, that their case was covered against them by the Tribunal's decision in Andhra Pradesh Paper Mills (supra). In this connection, it was pointed out that, in the case of Assistant Collector of Central Excise v. Ramakrishnan Kulwant Rai, 1989 (21) ECC 186 (SC) : 1989 (41) ELT 3 (SC) the Apex Court proceeded to examine the validity of a rule (Rule 10A of the Central Excise Rules, 1944), notwithstanding the fact that the Standing Counsel for the Central Government had conceded that the demand in question (under Rule 10A) was not sustainable in view of the Supreme Court's decision in 18 STC 370. Ld. Counsel also pointed out that it was a mistake on the part of the appellants' Counsel to have conceded applicability of the ratio of the Tribunal's decision in Andhra Pradesh Paper Mills (supra) to the base on hand. Such `mistake' of concession did not stand in the way of this Tribunal rectifying the mistake pointed out by the party. In this connection, reliance was placed on the Federal Court's judgment in Mst. Jamna Kuer v. Lal Bahadur, AIR (87) 1950 Federal Court 131, wherein it had been held that, where there was an error apparent on the face of the record, whether the error occurred by reason of the Counsel's mistake or by reason of oversight of the Court was not a circumstance which could affect the exercise of the jurisdiction of the Court to review its decision.

7. One of the "mistakes" pointed out in the present application is that, in the Final Order, this Bench did not consider the material aspects/facts concerning the nature/utility of Wires and Felts in the paper-making industry, which had been brought to the notice of the Tribunal through the appeal memorandum as well as the Counsel's submissions at the hearing stage. But we find that it was after reiterating the grounds of appeal that the Counsel for the appellants conceded that their case was covered against them by the Tribunal's decision in Andhra Pradesh Paper Mills (supra). This is evident from the opening paragraph of the Final Order, which reads as under:

"--The learned Counsel for the appellants reiterated the grounds of appeal. He, however, fairly conceded the case is covered against the appellants in view of the decision of the Tribunal in the case of Andhra Pradesh Paper Mills Ltd. v. CCE, 1990 (50) ELT 252".

We are of the considered view that there was no mistake, let alone mistake apparent from the record, in not having discussed or considered the grounds of the appeal, in the Final Order, inasmuch as the appellants' Counsel, after stating such grounds conceded that "their case" was covered against them by the Tribunal's decision in the case of Andhra Pradesh Paper Mills (supra). What was conceded was that the appellants' "case" was covered by the Tribunal's earlier decision, which meant that the entire dispute in the appeal stood covered by such decision. It was argued by Shri Sridharan, relying on the Federal Court's judgment, that the Counsel's "mistake" of having conceded the Revenue's case was not a circumstances that affected the Tribunal's jurisdiction to rectify its order. In this context, we may state that there was no mistake on the part of the appellants' counsel when he conceded the Revenue's case in the light of the Tribunal's decision in Andhra Pradesh Pradesh Paper Mills (supra) as no contra decision of the Tribunal or any Higher Court or the Supreme Court was available to him at that stage. Moreover, the Federal Court was dealing with a Court's power of review under the Code of Civil Procedure, which power is not the same as this Tribunal's power of rectification of mistake. Therefore, the reliance placed by Ld. Counsel on the Federal Court's judgment is of no avail. With reference to Counsel's concession made at the hearing stage of the appeal, Shri Sridharan has relied on the Supreme Court's decision in Ramakrishnan Kulwant Rai's case (supra), wherein the Standing Counsel for the Central Government had conceded that the demand raised on the respondent was not sustainable under Rule 10A of the Central Excise Rules, 1944 in view of the Supreme Court's judgment in HAJI J.A. Kareem Sait v. DCTO, Mettupalayam, 18 STC 370. It was, later, clarified on behalf of the appellant that the Standing Counsel had not conceded that Rule 10A was invalid but had only said that, in view of the decision in 18 STC 370, he would not be able to sustain the demand raised under Rule 10A. It was further argued on behalf of the appellant that, even if it could be taken as a concession, the appellant could not be estopped from showing that the rule was valid. This contention was accepted by their Lordships, who then proceeded to examine the validity of Rule 10A. Shri Sridharan has argued that, as in Kareem Sait's case, the concession made by the appellants' Counsel at the hearing stage of the appeal should not stand in the way of the appellants seeking rectification of the Final Order, which was passed on the basis of such concession.

After careful consideration, we find a clear distinction between the instant case and R.K. Rai's case. In R.K. Rai's case, what had to be examined by the Apex Court was the validity of a Rule and it was incumbent on the Court to determine whether the Rule was valid or not, after hearing rival arguments. The appellant in that case wanted to show the Rule to be valid so as to justify the demand raised thereunder on the respondent. On the other hand, the respondent wanted to resist the demand by showing that the Rule was invalid. This kind of `lis' was, obviously, not affected by what was conceded by the Government's Counsel. The instant case, in our opinion, is not comparable to that of R.K. Rai's (supra). What was conceded by the appellants' Counsel at the hearing stage of the captioned appeal was that their case was covered against them by the Tribunal's decision in Andhra Pradesh Paper Mills (supra). That was an omnibus concession, far removed from what was conceded by the Government's Counsel in R.K. Rai's case. The concession in R.K. Rai's case had stopped short of touching the validity of Rule 10A ibid which was the core point of dispute before the Apex Court. Therefore, R.K. Rai's case does not seem to support the present application, which, in our view, cannot be maintained vis-a-vis the concession made by the counsel at the hearing of the appeal.

8. Much arguments have been made and case law cited on the question whether a Final Order of the Tribunal can be held to be containing a "mistake apparent from the record" on account of the fact that there is a subsequent contra decision by the Tribunal or any High Court or the Supreme Court on the same issue as the one decided in such Final Order of the Tribunal. We find that the majority view taken by the Tribunal's Larger Bench in Gujarat State Fertilisers and Chemicals (supra) is mainly based on the Supreme Court's judgment in the case of DOKKA Samuel v. Dr. Jacob Lazarus Chelly, 1997 (4) SCC 478, wherein it was held that an omission to cite an authority of law was not a ground for reviewing a judgment on the premise that there was an "error apparent on the face of the record." The Larger Bench observed that, if the non-citing of a judgment already in existence could not be a ground for review of the order which was passed without reference to such judgment, it was incomprehensible that a subsequent judgment which was not in existence when the order was passed, could be a ground for rectifying the order. Ld. SDR has relied on this view taken by the majority in Gujarat State Fertilisers & Chemicals (supra). On the other hand, Ld. Counsel has endeavoured to canvass support for the minority view in the said case. It has also been pointed out that the Tribunal has no power of review, though it has the power of rectification of mistake. We have no disagreement with the proposition that this Tribunal has no power of review but only the power to rectify apparent errors in its own orders. As a matter of fact, it has been so observed by the Apex Court in the Central Excise case of CCE, Calcutta v. A.S.C.U. Ltd., 2003 (90) ECC 438 (SC) : 2003 (151) ELT 481 (SC) vide para 5 of the judgment reading as under:

"5. At this stage it must be mentioned that under the Act there is no power of review available to the Tribunal. The only power available is the power of rectification of a mistake apparent from the record."

However, as neither side has been able to make out a clear distinction between "review" and "rectification" in relation to appellate orders of this Tribunal, we may proceed, at present, on the premise that both work on the same principle and with the same object. In Dokka Samuel (supra), as rightly pointed out by Ld. Counsel, the Supreme Court was examining the scope of review under Order 47, Rule 1 read with Section 114 of the Code of Civil Procedure. In that case, obviously, the Apex Court had to ascertain whether, in an order passed by the Karnataka High Court there was any "error apparent on the face of the record" warranting its review. In that context, their Lordships held that an omission to cite an authority of laws was not a ground for reviewing a judgment. According to the ruling in Dokka Samuel, no judgment is liable to be reviewed on the ground that there is an "error on the face of the record" on account of a party's omission to cite an authority of law which was in existence at the time when the judgment was passed. In the instant case, the appellants have no claim that they had omitted to cite any favourable pre-existing authority of law at the final hearing stage of the appeal. They have requested for rectification of "error" on the ground that, in a subsequent decision, the Tribunal has taken a view contra to the one taken earlier in their case. We are unable to accept this plea of the appellants as it is repugnant to the view taken by the Larger Bench in Gujarat State Fertilizers & Chemicals (supra) by relying on the ruling of the Supreme Court in Dokka Samuel (supra). We have also noticed that the decision of the Larger Bench in the said case has been followed by another Larger Bench of the Tribunal in the case of Mira Silk Mills v. CCE, Mumbai, 2003 (153) ELT 686.

The Larger Bench, in GSFC's case, has also relied on the Madras High Court's judgment in the case of Shree Palaniappa Transports v. Commissioner of Income Tax, 1999 (238) ITR 492 (Mad) wherein it was held that any decision of the Income tax Appellate Tribunal on a debatable issue, at a time when there was no decision of the jurisdictional High Court available on such issue, could not be deemed to have been erroneously made merely because, subsequent to the decision of the Tribunal, the jurisdictional High Court rendered a contra judgment on such issue. We have no doubt that the majority view of the Larger Bench in Gujarat State Fertilisers & Chemicals (supra) based on the Supreme Court's ruling in Dokka Samuel case (supra) and the Madras High Court's decision in Shree Palaniappa Transports (supra), must govern the instant issue.

9. Ld. Counsel has heavily relied on the Apex Court's judgment in the case of Narayana Row as well as the Andhra Pradesh High Court's judgment in the case of Seshavataram (supra). In Narayana Row's case a question had arisen as to whether an order of the assessing authority could be rectified under the Income tax Act on the basis of a subsequent decision of High Court later affirmed by the Apex Court. In B.V.K. Seshavataram's case also, a similar question arose before the High Court. In both the cases, rectification was allowed. Ltd. Counsel has also relied on the Madras High Court's decision in the case of V-GUARD INDUSTRIES (supra), wherein, on the basis of a subsequent decision of the Supreme Court, an application for rectification was allowed under the Tamil Nadu General Sales Tax Act. We observe that there is an apparent distinction between Narayana Row's case and Dokka Samuel's case considered by the Supreme Court. In the former case, rectification was allowed by their Lordships after noting that certain levy of tax was illegal. That was a case of rectification of an order of assessment passed under the Income tax Act. The rectification was on the ground that the levy was illegal, i.e., not authorized by law. The levy had been declared illegal by High Court in a judgment which was passed after the original assessment order. On these facts, it cannot be said that the rectification of the assessment order was allowed on the ground of the High Court's subsequent declaration on the other hand, it was allowed on the ground that the above levy was not authorised by the Income tax Act as the Act stood at the time when the assessment order was passed. In this view of the matter, Ld. Counsel's reliance on Narayana Row seems to be misplaced. The case of Dokka Samuel is altogether different. We have already discussed it in an earlier part of this order. In this situation, the ratio of the Apex Court's decision in the case of Dokka Samuel requires to be followed in the instant case. It is also pertinent to note that, in the case of V-Guard Industries (supra), the Madras High Court did not notice the Apex Court's ruling in Dokka Samuel. Therefore, in our view, the present application cannot claim support from the decisions cited by Ld. Counsel.

10. Without prejudice to the above view of ours, the issue can be examined in a different angle also. There is essentially no difference between "error or mistake apparent on the face of the record" (ground for review) and "error or mistake apparent from the record" (ground for rectification). But this Tribunal has no power of review and has only the power to rectify its orders, the latter power being narrower in scope. This would mean that the Tribunal cannot review its order even in the guise of rectifying it. If this be so, the meaning and scope of "error/mistake" for the purpose of rectification cannot be same as that for the purpose of review. The expression has a narrower meaning for the purpose of rectification, as the power to rectify, per se, is of narrower scope than the power to review. What is required by the present applicants is nothing short of reversing the decision taken in the Final Order in view of a subsequent decision of the Tribunal, which was not a part of the record of the appeal when the Final Order was passed. To our mind, such an exercise will be a review of the Final Order rather than its rectification. But we have no power of review and consequently the present application, which is in the nature of one for review, has got to be rejected.

11. As observed by the majority in Gujarat State Fertilisers & Chemicals (supra), the finality of a Final Order passed by the Tribunal should not be allowed to be disturbed by re-agitation of settled issues through applications of this kind, as it is subject only to the provisions of Section 35 G or Section 35L of the Central Excise Act vide para 41 of the Larger Bench's judgment (in GSFC case) reading:

"While exercising the power of rectification of mistake, Tribunal must bear in mind the provisions of sub-section (4) of Section 35C, which reads as under:

"Save as provided in Section 35G or Section 35L, orders passed by the Appellate Tribunal on appeal shall be final."

Section 35G provides for reference, to High Court of questions of law arising from orders passed the Tribunal in appeals. Section 35L provides for appeals to the Supreme Court from judgments of the High Court delivered on a reference made under Section 35G in any case certified by the High Court to be a fit case for such appeal, and also from orders passed by the Appellate Tribunal in appeals. According to Section 35C(4), the finality of an order passed by the Appellate Tribunal in any appeal is subject to the provisions of Sections 35G and 35L only."

The finality of our Final Order dated 25.11.1991 cannot be allowed to be shaken by a party saying that the order is contrary to a later decision of the Tribunal. It should be appreciated that it is impossible for the Tribunal to follow a non-existing case law. We are at a loss to understand as to how any mistake (let alone "mistake apparent from the record") can be found in the impossible. After all, impotentia excusat legem.

12. In the result, the application is dismissed.

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