Page 176 - ELT_1st June 2020_VOL 372_Part 5th

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3. Against Annexure-A order passed by the Tribunal, the Department
(Revenue) had filed application seeking ‘rectification of mistake’, under Section
35C(2) of the Central Excise Act. The application for rectification of mistake was
filed on the ground that, the position of law on the point has been declared
through a subsequent decision of the Hon’ble Supreme Court in Union of India
and Others v. Dharamendra Textile Processors and Others [2008 (231) E.L.T. 3 (S.C)].
The application for rectification of mistake was opposed inter alia contending
that, the subsequent declaration of law by the Supreme Court cannot be taken as
an error apparent on the face of the record, with respect to which a rectification is
possible. Through an order passed by the Tribunal on 14-7-2009 (Annexure-D)
[2010 (261) E.L.T. 110 (Tri.-Bang.)] the application for rectification of mistake was
allowed and the final order already passed in the appeal was recalled. The Tri-
bunal found that, the penalty was set aside in the appeal only on the basis of the
decision of the High Court of Karnataka in Sreekrishna Pipe Industries (supra) and
also on the basis of the decision of Apex Court in Rashtriya Ispat Nigam Ltd. (su-
pra). But in view of the subsequent decision of the Hon’ble Supreme Court in
Dharamendra Textiles (supra), it is felt that the earlier decision of the Tribunal
would be in conflict with the ratio settled therein. Therefore the Tribunal found
that the final order passed in the appeal need to be recalled and the appeal need
to be re-heard and decided. Accordingly the appeal was restored and heard
again and decided through the order passed on 26-7-2018, which is impugned
herein.
4. In the impugned order, the Tribunal found that, in Dharmendra Tex-
tiles (supra) the Apex Court had held that there is no scope for any discretion
with respect to imposition of penalty and that levy of penalty is mandatory un-
der Section 11AC. According to the Tribunal, even though the decision of the
Hon’ble Supreme Court is rendered after the order of the Tribunal, it would be
the case of an error apparent from the face of records, and a rectification of the
mistake is possible. In support of such proposition, the Tribunal had placed reli-
ance on a Larger Bench decision of the Tribunal itself reported in Hindustan Lever
Ltd. v. Commissioner of C. Ex., Mumbai-I [2006 (202) E.L.T. 177 (Tri.-LB)]. The Tri-
bunal had also considered other issues involved in the appeal on its merits and
decided the appeal totally de novo. Ultimately it was decided that the appellant is
liable to pay penalty equal to the duty evaded, in view of the decision of the
Apex Court in Dharamendra Textiles (supra). It is the said finding which is as-
sailed in this appeal.
5. The only question agitated is whether the reopening of the appeal
and the fresh decision taken on the basis of the application filed seeking rectifica-
tion of mistake is legally sustainable or not. To be more precise, question agitated
is, whether a subsequent declaration of law through decision of the Apex Court
can be considered as a mistake apparent on the face of the record, enabling a rec-
tification under Section 35C(2) of the Act.
6. Learned Standing Counsel for the respondent, Sri. Thomas Mathew
Nellimoottil, raised a preliminary dispute with respect to maintainability of the
above said challenge, in view of the earlier order passed by the Tribunal allowing
the application seeking the rectification of mistake, which remained unchal-
lenged. In support of such a contention, he has drawn our attention to the provi-
sions contained in Section 35G of the Act, which provides an appeal to the High
Court from any order passed in an appeal by the Appellate Tribunal. Contention
is that, since the appellant herein had not chosen to challenge the order of the
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