LexCOMMISSIONER OF CENTRAL EXCISE, BELAPUR, MUMBAI versus RDC CONCRETE (INDIA) P. LTD.
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A B [2011] 9 S.C.R. 982 COMMISSIONER OF CENTRAL EXCISE, BELAPUR, MUMBAI v. RDC CONCRETE (INDIA) P. LTD. (Civil Appeal No. 4409 of 201) AUGUST 9, 2011 [DR. MUKUNDAt<AM SHARMA AND ANIL R. DAVE, JJ.] C Central Excise Act, 1944 - s. 35C(2) - Application under - For rectification of mistake ·- Power of appellate tribunal - Held: Re-appreciation of ev·idence on a debatable point cannot be said to be rectification of mistake apparent on record - Mistake apparent on record must be an obvious and D patent mistake - It cannot be something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions - Decision on a debatable point of law c.9nnot be a mistake apparent from the record - On facts, the! appellate Tribunal exceeded E the powers given to it u/s. 35C(2) of the Act, and tried to re- appreciate the evidence and reconsider its legal view taken earlier in pursuance of a rectmcation application, which it could not have done so - Thus, the order passed in pursuance of the rectification application is bad in law and, is F rquashed and set aside. Respondent-Company is engaged in the manufacturing of pavers. According to appellant- Revenue Department, the respondent sold its excisable goods to a related person or an inter-connected G undertaking at a particular price and immediately thereafter, the inter-connected company had sold the very same goods at much higher price to another company, for the purpose of evasion of excise duty. A Cost Accountant was appointed to ascertain value of the H 982 ' ) ... COMMISSIONER OF CENTRAL EXCISE, BELAPUR, MUMBAI 983 \ _.. v. RDC CONCRETE (INDIA) P. LTD. goods manufactured by the respondent. Thereafter, the A Department raised demand for excise duty together with interest and equivalent amount of penalty. The respondent challenged the same. In the appeal filed by the respondent, the CESTAT upheld the demand of duty with interest and penalty. However, certain amount of B penalty was set aside. The respondent filed an application for rectification of the said order under Section 35C(2) of the Central Excise Act, 1944. CESTAT modified the original final order to such an extent that the entire demand of duty was quashed and set aside as also c the penalty imposed upon the respondent-Company and the Directors of the Company was set aside. CEST AT also accepted the submission raised by the respondent that ~ an employee of the Department who was not in practice 1 as a Cost Accountant, could not have been appointed to D ascertain the value of the goods manufactured by the respondent (which was raised in the appeal but was not accepted by the CESTAT earlier) and did:•not accept the valuation arrived at by tEe Cost Accountant and the order was modified. Ther fore, the appellant-Revenue E Department filed the instant appeal. Allowing the appeal, the Court ). HELD: 1.1 A mistake apparent on record must be an obvious and patent mistake. A "mistake apparent from F the record" cannot be something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. A decision on a debatable point of law cannot be a mistake apparent from the record. [Paras 16 and 21] [992· G D·E; 999-G-H; 995-A·B] T. S. Bairam v. Mis. Vo/kart Brothers 82 ITR 50; /TO v. Ashok Textiles 41 ITR 732 - referred to. 1.2 If one looks at the subsequent order passed by H 984 SUPREME COURT REPORTS [2011] 9 S.C.R. A the CESTAT in pursuanc:e of the rectification application, it is very clear that the CESTAT re-appreciated the evidence and came to a different conclusion than the earlier one. At an earlier point of time, the CESTAT came to a conclusion that the company to which the B respondent-assessee sold its goods was an inter- connected company. In the circumstances, according to the CESTAT, the decision of the department to appoint a Cost Accountant to ascertain value of the goods manufactured by the as;essee was considered to be just c and proper. However, after considering the submissions made in pursuance of the rectification application, the CESTAT came to a difforent conclusion to the effect that the asessee company and the buyer of the goods were not inter-connected cc>mpanies. Different conclusions 0 were arrived at by the CEST AT because it re-appreciated the evidence in relation to common directors among the com
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