1. By this Rectification of Mistakes (ROM) Application the applicant submits that there are mistakes apparent on the face of the record and the applicant seek re-call of the Tribunal Order and prays that the matter be re-heard. The applicant has reproduced certain portions of the decisions arrived at by the Tribunal in the order to submit that there are mistake apparent on the face of the record.
2. Shri A.S. Sundararajan, learned Counsel appeared for the applicant and submitted that there are mistakes apparent on the face of the record on the decisions arrived at by the Tribunal. The mistakes apparent on face of the record of the finding of the Tribunal as framed by the applicant are as under: (1) In para 7 (a) of the impugned order the Tribunal has observed that "as already noted, this is a highly technical matter". After recording such an authoritative finding the other proceeds to report certain findings on the merits of the case in subsequent paragraphs which appears are self contradictory.
(2) At para 7(b) a specific finding has been recorded that the goods under reference are not computer software. However, this question did not arise for consideration as the adjudicating authority has already recorded a finding in favour of the applicant by recording that the goods under reference are computer software simplicitor.
There is no appeal by the department on this aspect. In the circumstances there is a mistake apparent on the face of the record.
(3) At para 7 (c) certain findings have been recorded on the basis of what is contained in the Annexure to the show cause notice. It is submitted that the noticee is required to meet the allegations contained in the notice and not what is alleged to be contained in the Annexures. In the circumstances, there is a mistake apparent on the face of the record.
(4) Para 7 (d). The applicant contends that certain decisions which are binding on the Tribunal have not been followed. Hence, there is error apparent on the face of the record in not following binding decisions.
(5) Para 7(e). In this para in regard to the plea that value for the purpose of assessment under Section 14 of the Customs Act has to be in accordance with the Circular No. 330/46/97 dated 20.8.97. The Tribunal has recorded that matter was not before the lower authorities. It is submitted that the Circular of the Department was binding on the authorities as held by the Hon'ble Tribunal in several cases. Therefore, the remand of the case in this regard without recording a finding is an error apparent on the face of the record.
(6) In regard to the plea that Section 11A(1) of the Act was not invocable, the findings are not definite and the failure to lay down the law in this regard would go against the applicant. In the circumstances, there is an error apparent on the face of the record.
(7) Para 7(g) & (h), In regard to the plea of imposition of penalty under Section 11AC and Rule 173Q of the Rules, it is submitted that certain findings have been recorded, which are per incurrium of the statutory provisions. This amounts to an error apparent on the face for record.
(8) Regarding confiscation of Plant and Machinery, under Rule 173(A)(2) of the Rules, after noting a decision at the bar the Tribunal has not recorded any finding but has remanded the matter.
When all the facts are available on the question of remand does not arise. The Tribunal was duty bound to record its finding and decision on the basis of the statutory provisions and the law laid down.
4. We have considered the submissions and noted the portions of decisions recorded by the Tribunal and which are stated to contain error apparent on record. Before we proceed to examine the contention of the learned Counsel for the applicant it is necessary to appreciate what is envisaged by Section 129B "The Appellate Tribunal may at any time within six months from the date of the order, with a view to rectifying the mistake apparent from the record amend any order passed by it under Section (1) and shall make such amendments if the mistake is brought to its notice of the Commissioner or the party to the appeal" 5. It is clear that what the Section envisages that the Tribunal may rectify the mistake apparent on record and not the decision reached by it in appreciation of the evidence on record.
6. We have also perused various case laws on the subject and some of which are as under: (1) In the case of Dinkar Khindria Dinesh Khindria v. CC, New Delhi the Larger Bench of the Tribunal presided over by the Hon'ble President, Justice K. Sreedharan, 2002 (83) ECC 875 (LB) : 2000 (38) RLT 442 (CEGAT-LB), it was held that Statute does not empower CEGAT to recall and review an order validly passed by CEGAT -- a decision on a debatable point of law or fact is not a mistake apparent from records. -- ROM Application lies only for patent mistake and order already passed in respect of one noticee not to be recalled and reheard alongwith appeal of other co-noticees, though all appeals had arisen from same Order-in-Original. This judgment had relied upon a large number of judgments including that of the Hon'ble Supreme Court.
(2) In the case of Quality Exports and Ors v. CCE, Meerut, 2000 (67) ECC 566 (T) : 2000 (39) RLT 85, it was held that in regard to Mistake apparent from record, Interpretation should be glaring mistake of fact or law which should be apparent from the record and that mistakes made out by process of arguments are outside the purview of Section 35C (2), C.E.A. This judgment had relied upon the judgment of the Hon'ble Apex Court in the case of CIT v. Hero Cycles Pvt. Ltd., Ludhiana, 1997 (8) SCC 502.
(3) In the case of Haryana Acrylic Co. and Ors. v. CCE, New Delhi, 2001 (47) RLT 677 wherein the Tribunal rejected the ROM application and it was held that when not a single ground in the application highlights any glaring mistake on the face of record and points raised in the application have already been considered, ROM is to be rejected. This judgment also relied upon two judgments of the Hon'ble Apex Court in the case of CIT v. Hero Cycles and that of Bhagwat Prasad v. DSMDC, AIR 1990 (SC) 371, apart from various other judgments.
(4) In the case of Om Prakash Bhatia v. CC, 2001 (76) ECC 778 (LB) : 2001 (45) RLT 119 (CECAT-LB) the Larger Bench of Five-Members presided over by the President of the Tribunal Justice K. Sreedharan has held that, while considering application under Section 129B (2) of the Customs Act, 1962, mistake apparent from the record contemplated by Section cannot be one that is to be brought out by a long drawn out argument. The mistake apparent from the record cannot be spelt out on the ground that all the grounds mentioned in the memo of appeal were not dealt with by the Tribunal when it pronounced in the Final order.Shree M. Mohan & Company v. CC New Delhi, 2001 (47) RLT 931, it was held that expression of views different from those taken in another similar case with different facts is not a mistake apparent on the fact of the records.
Point No. 1. The mistake said to be apparent on the face of the record according to the learned Counsel is that after reaching a finding that "this is a highly technical matter", the finding reached by the Tribunal in the subsequent paragraphs are self-contradictory.
It is true that the Tribunal has entered a very categorical finding that the issue to be decided in the case is highly technical in nature and therefore, the adjudicating authority had to be guided by expert opinion and expert opinion was therefore sought for from Shri V.V. Shastri, Head of the Computer Centre, IIT, Chennai which has been relied upon in the impugned order. Though he has adverted to the same in the impugned order and quoted certain portions of the same in the order, a copy of the report was not made available to the appellants and the report was read over to the opposite side during the personal hearing. The Tribunal therefore, held that this amounted to violations of principles of natural justice. In fact that the appellant (applicant) himself in the grounds of appeal made a grievance of not furnishing copy of the expert opinion to them.
This grievance of the applicant was correctly addressed by the Tribunal and it was for that reason with a view to giving a chance to contest the expert opinion that the Tribunal has remanded this point for reconsideration with a direction that the expert opinion shall be taken into consideration by the adjudicating authority.
Therefore, it is not understandable as to how it can be said that there is mistake apparent on the face of record in the finding arrived at by the Tribunal.
Point No. 2. The adjudicating authority had not reached a finding in favour of the appellant/applicant that the goods under reference are computer software as now contended by the applicant in the ROM application. What the Commissioner had held after considering the expert opinion given by the expert Shri V.V. Shastri, and after considering the explanation as to what is "Computer Software" as provided for under Notification No. 11/97, as amended by Notification, 3/98, was that there is a distinction between CD ROMs on the one hand and CD Audio and Video on the other. He has also held that the appellants are not entitled to NIL rate of duty under chapter Heading 8524.20 of the Tariff. In fact, to the specific question whether CVD can be charged on the hardware if CD's contents are in the nature of Computer Software, the appellant himself in the written submission filed in the Court, under para 11 has clearly stated that Even though the Commissioner himself has posed this question to himself he does not appear to have answered the same...... and that it is an obitor finding on which the Tribunal may not give any finding. Further, in the grounds of appeal, the appellants has specifically claimed relief among other things, including quashing of the order of the lower authority and to pass any other order or orders, as the Tribunal may think fit and proper.
The Tribunal did not find that the finding of the Commissioner was obiter. The Tribunal has therefore after taking into consideration the finding of the lower authority, the Notification No. 11/97 which explains what is "Computer Software" and in appreciation of the evidence on record and the plea advanced by both the sides, had come to conclusion that the items cleared by the appellants are not computer software. Therefore, the applicant cannot now turn around and say that the Commissioner has held that the goods under reference are computer software simpliciter. It is therefore, not understandable as to how it can be contended that there is a mistake apparent on the face of the record calling for rectification.
Point No. 3. The applicant wanted to say that noticee is required to meet the allegations in the notice and not what is alleged in the Annexures to the show cause notice. In the show cause notice vide para 8, it was clearly stated that Annexures enclosed thereto may be treated as integral part of the show cause notice. The appellant has also replied to the show cause notice without questioning the Annexures. It is not understandable as to how the applicant can now turn around and say that they are not required to meet allegations in the Annexure to the show cause notice. In any event it is not understandable as to how it can be said that there is a mistake apparent on the face of record in the order of the Tribunal.
Point No. 4. The reason for remanding the matter as to whether concessional rate of duty of 50% in terms of Notification No. 2/95 dated 4.1.95 can be extended to the goods, has been well explained in the order of the Tribunal vide para 7(d). The Tribunal found that the case law cited in the matter of Ginni International Ltd. v. CCE, 2002 (79) ECC 85 (T) : 2002 (139) ELT 172 was not available before the lower authority when the impugned order came to be passed. It was in this circumstance that this aspect of the matter has been remanded to the lower authority to consider grant of benefit if any in view of the decision in the cited case. When the matter has been remanded for reconsideration in appreciation of the evidence on record and the Notification and the case law cited, it cannot be said that there is a mistake apparent on the face of the record of the Tribunal.
Point No. 5. What the Tribunal held was that the cited Circular No. 330/46/97 dated 20.8.97 was not considered by the lower authority.
By remanding the matter, the party has been given an opportunity to cite the circular and pray for the relief flowing from the Circular.
By doing so, the Tribunal has not committed any error and such conclusion reached by the Tribunal cannot be said to contain any mistake apparent on record.
Point No. 6. With regard to invocation of the longer period of limitation, the Tribunal has very clearly noted that the appellant has asserted that they have indicted in the invoice that duty shall be payable as may be determined by the authorities. The matter was remanded for the purpose of causing verification as to whether such remarks were clearly indicated in the invoice alongwith the documents like RT 12 returns to see whether there was any intention to evade payment of duty. If the appellants had made such remarks, it was held that there was no intention to evade payment of duty.
Therefore, an opportunity has been given to the appellant/applicant to prove their innocence by convincing the authorities of their good intention. The Tribunal has correctly arrived at a finding that if the appellants fail to convince the authorities by showing the invoice where such remarks were said to have been made, then their intention to evade payment of duty was clear and in such circumstances, longer period of limitation can be invoked. In the face of the assertion made by the appellants, their difficulty in convincing the authorities of their clear intention is not understandable. In any event it cannot be said that the decision to remand this aspect of the matter can be said to give rise to ROM application.
Point No. 7. It was found that when appellants have been found removing the goods clandestinely, penalty is imposable under Section 173(Q) of the CE Rules. It was also found that the mandatory penalty imposed under Section 11AC was more than the maximum permissible limit and it was in those circumstances the matter was remanded for refixation of the penalty citing the relevant case law. As regards imposition of penalty under both the provisions i.e. Rule 173Q and mandatory penalty under Section 11AC, it was held that we have been taking a consistent view that penalty under both the provisions has to be apportioned and in the present case the lower authority has apportioned penalty under both the provisions. Further, quantum of penalty will also depend on the quantum of duty ultimately adjudged in the de novo adjudication. While remanding, it was also held that the appellants are at liberty to cite authorities against imposition of penalties under both the provisions. We are not able to understand as to how ROM lies against such finding arrived at by the Tribunal.
Point No. 8. With regard to Confiscation of Plant and Machinery, it was found by the Tribunal that no reason was spelt out nor was there any finding given by the lower authority that the offence has been committed repeatedly. It was for this reason, that this aspect of the matter was remanded with a direction to re-examine the issue.
8. In view of above, we hold that there is no mistake apparent on the face of the record of the Tribunal and the present ROM application has been moved against a decision reached by the Tribunal in appreciation of evidence. It is well settled, as is clear from the various case laws cited above, that ROM application lies only against mistake apparent on the face of the record and no ROM lies against a decision reached by the Tribunal in appreciation of evidence. As noted above, in the present case, mistakes said to contain the order of the Tribunal are drawn out of long process of argument which are clearly outside the purview of Section 129B(2) of the Customs Act, 1962. In view of above, if the appellant/applicant was not satisfied with the decision rendered by the Tribunal, the best course open to him was to file appeal before the appropriate 9. I have carefully gone through the order prepared by my Ld. Brother.
While agreeing with most of the points, I have to differ on one point with regard to the clear cut findings given on merits that the item constitutes is not "computer software," as given in para 7(b) of the order at page 24 in the last line which is contrary to the findings recorded in para 7(a). In para 7(a) at page 20 clearly held that: "The question to be decided is whether the goods involved in the present case viz. CD Audio, CD Video and CD ROMs are computer software or not. We observe that the issue to be decided in the case is highly technical in nature and therefore, the adjudicating authority had to be guided by expert opinion. The expert opinion was therefore sought by the department from Shri V.V. Shastry, Head of the Computer Centre, IIT, Chennai which has been relied upon in the impugned order. Though he has adverted to the said report and quoted certain portions of the same in the impugned order, a copy of the report was not made available to the appellants and the report was only read over to the opposite side during personal hearing and this amounts to violation of principles of natural justice. We observe that there is force in the plea taken by the appellants in this regard more particularly when the findings arrived at by them is against them. As already noted, this is a highly technical matter and just reading over the expert opinion at the time of personal hearing cannot be taken to be given the opposite side adequate and effective opportunity to explain their stand in the facts and circumstances of this case. Therefore, on this score, the matter has to go back for re-consideration after giving copy of the expert opinion given by the IIT to the appellants. The appellants have also relied upon similar expert opinion given by Dr. R. Sethuraman, Prof.
& Head of the Department of Hindustan College of Engineering. This expert opinion shall also be taken into consideration by the lower authority in the de novo proceedings".
10. From the above paragraph, it is very clear that Hon'ble Member (Technical) has not applied his mind on the aspect particularly to technical natural in view of the fact that copy of the report was not furnished to the appellants and the other evidences has not been considered. There is a clear finding of violation of principles of natural justice. In the circumstances it is inappropriate to hold as in para 7(b) in the last line, the following findings: "The items cleared by the appellants are not computer software as the items in question cannot be manipulated or interfered or interacted".
11. The submission of the appellant is that this observation and findings is fatal to the remand proceedings as it will foreclose them to contest the case on merits in terms of the direction given in para 7(b). It is also their contention that this is contrary and the findings has been arrived without appreciation of the evidence which was on record. I agree with the contention of the appellants that the portion of the findings in para 7(b) should not have been recorded and the mistake is apparent on record. The mistake is not something which arises from long term arguments and the case law cited is distinguishable. In my opinion the mistake is apparent on record and it is very clear that the rectification as noted should be allowed without hesitation. As indicated in para 7(a) it does not give any findings on merits and the matter has been held to be violative of principles of natural justice as the matter is technical in nature. In the face of this finding it is not proper to hold that the item is not computer software more particularly when all the issues have been remanded for de novo consideration. Therefore, I order that the last line in para 7(b) should be deleted and instead the following lines should be added: "The item whether it is computer software or not and whether it can be manipulated or, interfered or interacted is required to be re-examined in de novo consideration.
In view of difference of opinion the following question is referred to the third Member for determining the same: Whether the rectification of mistake filed by the appellant is required to be rejected for the reasons given by Hon'ble Member (T) Whether the rectification of mistake is required to be allowed to the extent indicated by Hon'ble Member (J) in his order as above.
13. I have perused the records and considered the submissions made by both sides on 11.2.2004 during the hearing on the Difference of Opinion referred to me.
14. The difference is as to whether the application in question filed by the appellant is within the scope of Section 129B(2) of the Customs Act. That section provides for "Rectifying the mistake apparent from the record".
15. The mistake being pointed out is that, in the remand order (for de-novo consideration of the issue), the Tribunal has recorded findings on merits, which will have the effect of making the remand an exercise in futility.
16. The learned Member (Technical) is of the opinion that an application made on the above ground does not come within the scope of "rectifying apparent mistake". He has relied on several decisions Dinkar Khindria Dinesh Khindria v. CC, New Delhi, 2002 (83) ECC 875 (LB) : 2000 (38) RLT 442 (LB) and Quality Exports and Ors. v. CCE, Meerut 2000 (39) RLT 85 etc., As against this, learned Member (Judicial) has expressed the view that the finding in para 7(b) of the subject order (on merits) should not have been recorded and, that mistake is required to be corrected by amendment on the original order.
17. During the hearing of the case, learned Counsel for the appellant has relied on the judgment of the Hon'ble Supreme Court in the case of Dimple Overseas v. Collector of Customs, Kandla 1998 (80) ELT 10 (SC) in support of the application and has submitted that the present case is identical to the case decided by the Apex Court.
18. Learned SDR has contended that the present application is beyond the scope of Section 129B(2). It is the SDR's contention that a perusal of the subject final order of the Tribunal and the orders recorded by the two Members on the present application make it clear that the application relates to findings recorded on merits of a classification dispute and not to a mistake apparent from the record of the case, It is being pointed out that after considering the classification issue, the final order has recorded certain findings. According to the learned SDR, the correctness of those findings can challenged only in an appeal before a higher Court and not through an application under Section 129B(2), The learned SDR has contended that present application seeks a review of the order passed and it is well settled that the Tribunal does not have the power to review its own orders, 19. The judgment of the Apex Court in Dimple Overseas case (supra) is not a decision on the scope of rectification of mistake applications contemplated in Section 129B(2) of the Customs Act. That judgment was passed in an appeal filed before the Hon'ble Supreme Court against an order of the Tribunal and not in a rectification of mistake application. Therefore, that judgment has no application to the issue involved in the present case. The Scope of Section 1298(2) is very narrow and an application filed under that Section can relate only to "mistake apparent from the record". That section does not permit the Tribunal to review an order already passed and correct mistakes made in recording findings. I am, therefore, of the opinion that the present application relates to findings recorded by the Tribunal in an appellate order and for that reason the present application is beyond the scope of Section 129B(2) and, therefore, cannot be entertained. The proper course of action for the importer is to file an appeal against that order.
20. Having recorded my opinion as above, on the reference made. I now return the appeal to the Division Bench for passing its final order.
In terms of majority order, the rectification application filed by the party is rejected.