Judgment:
1. M/s. G.T.C. Industries Ltd., Bombay (hereinafter referred to as 'GTC'), have filed the present application for rectification of mistake (ROM) with reference to Tribunal's Order No. 287 to 291/96 D dated 19-4-1996. The ROM application was received in the Registry on 4-7-1996. The Tribunal under their Final Order dated 19-4-1996 referred to above, after taking all the relevant considerations into account, had rejected the four appeals filed by the GTC and had accepted one appeal filed by the Revenue. The main grounds taken in the ROM application are that (1) the final order does not take into account most of the submissions of the appellants -GTC (2) the submissions have not been considered appeal-wise (3) the case law cited by the appellants had not been followed (4) on limitation, the submissions of the appellants with regard to the charge of wilful suppression had not been considered and (5) the provisions of Notification No. 201/79-C.E.had been mis-read.
2. The ROM application was heard on 17-9-1996 when Shri K. Prakash, Anand, Advocate with Shri R.L. Lamba, Advocate argued that the interpretation placed by the Tribunal on the issue of limitation was wrong. The ld. Advocate submitted that the various judgements referred to by the appellants had not been discussed. It was further stated that there was no suppression on the part of the applicants and that the franchise holder factories were their own factories. Appeal No. 5592/91 had not been discussed.
3. In reply Shri A.K. Madan, SDR submitted that what the applicants want through ROM application is the review of the order, which is not permissible under law. It was his submission that there was no case for ROM. There is no mistake in the Tribunal's order and all the relevant points have been discussed and orders recorded. He further stated that Appeal No. 5592/91 had been discussed in para-15 read with para-14 of the order.
4. We have carefully considered the matter. The five appeals - 4 appeals by M/s. GTC and one filed by the Revenue called for decision on related issues. They were heard together and were disposed of by the common order dated 19-4-1996 referred to above. The three issues involved in those appeals were as under :- (1) Whether the credit of the central excise duty taken under Notification No. 201/79-C.E., dated 4-6-1979 (as amended) in respect of the inputs utilised in the manufacture of exempted cut tobacco and exempted waste tobacco (which was removed out of the factory in which the inputs were received, without payment of central excise duty), could be utilised for payment of duty on other cigarettes in which no such inputs were utilised.
(2) Whether the duty borne by the inputs whose credit has been taken and such credit already utilised while paying duty on the cigarettes in which such inputs had been used under Notification No. 201/79-C.E. aforesaid, is refundable under Rule 97 of the Central Excise Rules, 1944 when such cigarettes are returned back to the factory for re-processing after clearance under claim for refund.
(3) Whether limitation under Section 11A of the Central Excises and Salt Act, 1944 is applicable to the unauthorised credit utilisation availed of under Notification No. 201/79-C.E.5. After analysing the matter in detail, the Tribunal observed with regard to the point No. (1) above that the utilisation of the credit while paying duty on the cigarettes in which the inputs in question had not been used, (while the goods in which such inputs had actually been used being removed under exemption without payment of duty), was not covered by the provisions of the Exemption Notification No. 201/79-C.E.Similarly, the waste tobacco had been removed by the appellants without payment of duty under exemption, and the duty on the inputs, which had been used in such waste tobacco, had been utilised towards payment of duty for the cigarettes in which no such inputs had been used. It was held that this was also not covered by the provisions of the relevant Exemption Notification.
6. With regard to the second point, it was held that the refund claims, which had been sanctioned without dis-allowing the proportionate proforma credit/set off of duty relatable to the duty paid on the inputs used in such returned cigarettes (which duty had already been utilised by them while paying duty on such cigarettes when originally cleared), was liable to be dis-allowed under Para 3 of the Notification No. 201/79-C.E. as per provision below explanation under Rule 56A of the Rules (as inserted vide Notification X No. 104/79-CE., dated 3-3-1979). It was observed that the cut-tobacco and the waste-tobacco had been cleared on consideration to the outside factories, which were independent manufacturers in their own right, although they were producing cigarettes of the brand of 'GTC'. They had their own licence and manufacturing facilities and were being assessed to central excise duty on the cigarettes manufactured and cleared by them. The waste tobacco had not been destroyed, and had been removed on consideration and as such the matter was not covered by para-7 of the Appendix annexed to that notification.
7. On the question of limitation, it was observed that the Notification No. 201/79-C.E. was a self-contained provision. It has its own provision for adjustment, cash recovery, refund, limitation etc. While for accountal of the credit and its utilisation, the formalities as between the provisions of Notification No. 201/79 and the Proforma Credit Procedure under Rule 56A of the Rules would be considered as analogous, the two provisions were separate and independent, and Rule 56A specifically provided that where credit had been allowed on account of the various factors set-out therein, recovery of such credits allowed wrongly had to be done after serving a notice on the manufacturer within the period of six months or five years as the case may be, from the date when such credit had been allowed. Obviously, the absence of such provision in the Notification would indicate the intention that in the case of Notification No. 201/79-C.E. such a time frame was not contemplated.
8. The applicants have sought for the recall of the Tribunal's final order through the present ROM application. Under Section 35C(2) of the Act, the Appellate Tribunal may, at any time, within four years from the date of the * order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1) of Section 35C and shall make such amendments if the mistake is brought to its notice by the Collector of Central Excise or the other party to the appeals. The power of rectification is confined to the mistakes apparent from the record, calling for amendment of the order. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions (refer Supreme Court's decision in the case of Income Tax Officer v. Volkart Brothers, Bombay -AIR 1971 (SC) 2204. A decision on a debatable point of law or facts is not a mistake apparent from the record, and the debatable issue could not be the subject of an order of rectification. The rectification of mistakes does not envisage the rectification of an alleged error of judgement.
9. The order as recorded by the Tribunal had to be read as a whole. The order had not to be examined sentence by sentence, as it were, through the microscope simply to justify the ROM application. In the Tribunal's final order every material fact for and against the appellants had been considered fairly and with due care. All the evidence pros & cons had been considered in reaching the final conclusions. No consideration, which were irrelevant, no conjectures, no surmises, no suspicions, no pre-judice, had coloured the conclusions reached refer Supreme Court's decisions in (1) Homijehangir Gheesta v. Commissioner of Income Tax - 1961 (41) ITR 135 (SC) (2) DhirajlAl Girdhari v. Commissioner of Income TaxOmar Salay Mohmd. Sait v.Commissioner of Income Tax 10. It is not correct to say that the order recorded by the Tribunal did not take into account "most of the submissions" made by the applicants. It is no ground to assail the order that "the submissions made by applicant at the time of oral hearing took two hours of presentation". In the case of Vasudeo Vishwanath Saraf v. New Education Institute - AIR 1986 (SC) 2105 the Hon'ble Supreme Court had stated that it is not necessary that an order must be a lengthy one recording in detail all the reasons that played in the mind of the Court in coming to the decision. What is required is that the order must in a nutshell record the relevant reasons which were taken into consideration in coming to the decision.
11. In para-6 of the ROM application, it had been stated "another glaring mistake apparent on the face of the record is the mis-reading of the provisions of Notification No. 201/79". The so called mis-reading according to the person against whom an order had been recorded, of the provisions of law, could not be a ground for ROM.Rectification of mistake is by no means an appeal in disguise whereby an order even if it is not valid, is re-heard and re-decided. ROM lies only for patent error. Only in a case where the mistake stares one in the face and there could reasonably be no two opinions entertained about it a case for ROM could be made out (refer Supreme Court's judgement in the case of Tungabhadra Industries Ltd. v. Govt. of Andhra Pradesh -[AIR 1964 (SC) 1372 Para 11].
12. In Para 10 of the ROM application it had been pleaded that the decisions cited by the GTC had not been considered. The Tribunal's order had been recorded after giving careful consideration to the matter. The case law had been referred to in Paras 16,19 & 20 of the order. The case law is cited in support of the submissions. They do not make the submissions. The various decisions cited by the ld. Advocate were gone through but it was found that they did not advance the case of the applicants.
13. In the case of Finolex Cables Ltd., Pune v. CCE - 1983 ECR 2047 D (CEGAT), the matter related to the Collector's notice for review of the Asstt. Collector's order. The Collector's finding was that the intermediate product PVC compound was exempted from levy of duty and therefore, the proforma credit was not available to the appellants, Finolex Cables Ltd. The Asstt. Collector's order was issued on 29-9-1980 while the notice to review the same was issued by the Collector on 18-9-1981. The Tribunal had observed that the third proviso to Sub-rule (2) of Rule 56A lays down that in case the credit allowed is varied subsequently, the adjustment of the credit taken has to be made and if this is not possible for any reason, cash recovery has to be made from or refund given to the manufacturer. They further observed that since this amount of credit is thus taken as the duty of central excise for the purpose of recovery or refund, the time limits prescribed under Section 11A and 11B of the Act will come into operation. In the present proceedings, we were not concerned with the variation of the credit under Rule 56A of the Rules. In the case of Hindustan Lever Ltd., Bombay v. CCE - 1985 (19) E.L.T. 96 (Tribunal), the matter related to the eligibility of the duty paid under T.I. 68 on the printed cartons, which were used as packing of the synthetic detergents 'Surf for set-off under Notification No. 201 /79-C.E., dated 4-6-1979. The Department wanted to interpret the Notification to mean that the Item-68 goods should enter into the composition and form part or ingredients of the finished products. In other words, they should be used as raw materials or components. The Tribunal noted that the requirement that T.I. 68 goods should be vised as raw materials or component parts was written into the Notification only on 28-2-1982 by the amending Notification No. 105/82-C.E. Prior to the amendment, this was not a requirement. Prior to 28-2-1982, the only requirement was that Item No. 68 goods need have been used only in the manufacture of the finished excisable goods. It was with these considerations that the Tribunal held that till the Notification No. 201/79-C.E. was amended by the Notification No. 105/82-C.E., dated 28-2-1982, the appellants were entitled to the benefit of Notification No. 201/79-C.E. in respect of printed cartons on which duty under T.I. 68 had been paid. In the case of Premier Tyres Ltd. v. CCE - 1986 (26) E.L.T. 42 (Tribunal) the inputs were tyre cord warp sheets which had been originally cleared by the manufacturer of such warp sheets without payment of CED. Later on, these warp sheets were classified under T.I. 68 and the duty was paid by the manufacturer. On the basis of the Certificate issued by the jurisdictional Superintendent of Central Excise concerned with the factory of the manufacturer, the appellants took credit of the said duty amount in the RG 23 A/C under intimation to their Superintendent of the Central Excise. After more than two years a notice had been issued to the appellants. There was no allegation in the show cause notice about suppression of facts, etc. on the part of the appellants.
It was with such facts and circumstances that Tribunal held that the notice was hit by limitation. On the case of Sirsilk Limited v. CCE, Hyderabad -1988 (34) E.L.T. 399 (Tribunal) Acetaldehyde and Acetic Acid falling under T.I. 68 were used as inputs in the manufacture of Acetate Yarn/Staple Fibre/Tow falling under Tariff Item 18. Cellulose Acetate falling under Tariff Item 15A(1) was arising as penultimate final product in the continuous process of manufacture. The goods falling under Tariff Item 15A were exempted from the whole of the duty by other notifications. The issue for consideration was whether an input or raw material must go directly into the finished product for availing the benefit of Notification No. 201 /79-C.E., dated 4-6-1979. The Tribunal observed that the process of manufacture of Acetate Yarn/Staple Fibre/Tow out of Acetaldehyde and Acetic Acid was continuous.
The Cellulose Acetate which arose as an intermediate product was not cleared as such from the appellants' factory but was converted into the final finished product falling under T.I. 18 in the continuous process of manufacture. It was in such circumstances that the Tribunal held that set-off of duty was admissible to Acetaldehyde and Acetic Acid under Notification No. 201/79-C.E., dated 4-6-1979. The matter in the case of Bhagwan R. Sukhija v. K.L. Verma, Joint Secretary - 1988 (36) E.L.T. 523 (Bombay) related to preventive detention and had no relevancy to the facts of the present case. The Bombay High Court had held that the detenue was not to be kept in jail for longer time by referring the petition to the larger bench. The petition was allowed mainly on the ground that the detaining authority did not communicate to the detenue that a representation could be made against the order directing detention of the petitioner to the detaining authority. In the case of jenson & Nicholson (I) Ltd. v. CCE - 1988 (32) E.L.T. 174 (Tribunal) the raw materials were Pthalic Anhydride and Pentacrythritol, the intermediate products were Alkyd Resin, which were fully exempted from duty and the final products were paints and varnishes. The issue for consideration in those proceedings was whether the credit of duty in respect of raw materials could be denied on the ground that it was not directly used in the manufacture of the final goods but in the manufacture of intermediate goods, which might be exempted from duty. The Tribunal concurred with the view taken in the case of Collector of Central Excise v. Madras Rubber Factory Ltd., Madras -1987 (32) E.L.T. 579 (Tribunal). It was held in that decision that the benefit of Notification would be available even if the manufacture of the final product is in a factory different from the factory in which the raw materials are consumed so long as both belong to the same manufacturer. It had also been held in that decision that so long as the consumption of the raw material and the production of the final product was in the same factory it would not be in order to deny credit of duty in respect of the raw material on the ground that it was not directly used in the manufacture of the final goods but in the manufacture of intermediate goods, which may be exempted from duty.
The issue before the Tribunal in the case of Collector of Central Excise v. Consolidated Steel & Alloys Ltd. - 1989 (42) E.L.T. 286 (Tribunal) was whether prior to its amendment by Notification No.105/82-C.E., dated 28-2-1982, fire clay refractories like B.P. Sets, Fire Bricks, Nozzle, Laddie sleeves, which were used for filling the molten metal C.I. ingots (Cast Iron Ingots) were eligible to the benefit of Notification No. 201/79-C.E., dated 4-6-1979. The Tribunal did not accept the argument that the scope of the Notification No.201/79-C.E. should be restricted to only such inputs which go into the process of manufacture. The Collector of Central Excise (Appeals) against whose order the Revenue had filed an appeal, had left the issue of applicability of shorter limit of six months or of five years depending upon whether the appellants had applied or not for benefit of Notification in respect of the refractories. The Tribunal did not find any infirmity in the order of the Collector of Central Excise (Appeals). In the case of Collector of Central Excise, Calcutta v.Pradyumna Steel Ltd. -1996 (82) E.L.T. 441 (SC), the Deptt. had filed an application for ROM on the ground that the show cause notice was not sufficient to invalidate the same. The Supreme Court had recorded in para-3 of their judgement as under :- "It is settled that mere mention of a wrong provision of law when the power exercised is available even though under a different provision is by itself not sufficient to invalidate the exercise of that power." 14. Appeal No. E/5592/91-D related to the refund claim filed by the GTC as a consequence of Order-in-Appeal No. HN-25/B-II-75/87, which Order-in-Appeal itself was the subject matter of Appeal No. E/3537/87-D filed by the Revenue. In that Appeal No. E/3537/87-D, the Revenue had come in appeal on the ground that limitation under Section 11A of the Act was not applicable to the credit availed under Notification No. 201 /79-C.E. This appeal had been discussed in Para 14 of the Tribunal's order. The discussion about Notification No. 201/79-C.E. is contained in Paras-17,18,19 & 20 of the order.
15. Thus, we find that there is no mistake apparent from the record in the final order of the Tribunal No. 287 to 291/96-D, dated 19-4-1996 and no amendment is required to be made. The ROM application filed by the GTC Industries Ltd., Bombay is rejected. Ordered accordingly.