Shree Warana Sahakari Dudh Vs. Commissioner of Customs and Central - Court Judgment

Excerpt:
1. in this matter, an application has been filed for rectification of mistake under section 35c(2) of the cental excise act, which was apparent on the record to rectify the defects in the order dated 28.4.2001 passed by the tribunal in appeals e/2110/94 and e/496/95. the application arises in this way.2. the applicant manufactured malted foods at their plant at amrutnagar, maharashtra. they had an understanding with a company called cadbury india ltd. whereby the applicant had to manufacture bournvita (final product) using the raw materials and packing materials supplied by the said cadbury india ltd. as per the recipe and specification given by the said cadbury india ltd. the applicant would be paid rs. 3.75 per kg. for this activity. show cause notice dated 21.10.1992 was issued to both warana sahakari dudh utpadak prakriya sangh ltd. and cadbury india ltd. calling upon them to show cause why differential duty amounting to rs. 1,01,20,771/- being the duty calculated on cadbury products should not be recovered from them. the assistant commissioner confirmed the order. when the appeal was filed to the commissioner (appeals), the commissioner (appeals), after referring to the judgment of the supreme court in the case of ujagar prints 1999 (39) elt 493, held that the manufacturer of the product was not cadbury india ltd. but the applicant warana. however, the commissioner (appeals) held, "transport expenses of the cadbury employees + rent for the free office accommodation provided to the cadbury personnel + rent for godowns taken for storing of raw material + cost of technical know how provided free to the appellants + cost of goodwill. the matter is therefore, remanded back to the assistant collector to determine the assessable value in the manner cited above." against this order, the department as well as the appellant filed appeals. that is why two appeal numbers have been given. the department filed appeal e/2114/94 and the applicant filed e/496/95. by our order dated 9.4.2001, we had allowed the applicant's appal in part and dismissed the appeal of the department. in paragraph 8 of the said order, we had held as follows:- "8. we will now proceed to consider the elements of value that are included by the collector which are challenged by warana. the first of these is the cost of technical know-how provided by cadbury to warana and what is described as cost of goodwill. by technical know-how is meant the information that governs the process of manufacture exactly what proportion of what ingredients is to be used, and at what stage in manufacture, and the exact processes to which these are to be subjected. the cost of technical know-how therefore would generally form part of the cost of manufacture. such cost would however not includible in the cost relating to technical know-how would hence not form part of the assessable value." 3. the present application has been filed by the assessee stating at paragraphs 15 and 16 of the application as follows:- "(15) it is submitted that the said error is manifest upon a plan reading of the following sentences occurring in para 8 of the said order: "the cost of technical know-how therefore would generally form part of the cost of manufacture. such cost would however not includible in the cost relating to technical know-how would hence not form of the assessable value." (16) it is submitted that there appears to be an omission and/or typographical error in the second sentence, which might lend itself to an ambiguity in interpretation thereof, thus leaving the reader in doubt as to whether the cost of technical know-how is required to be included in the assessable value of the final product.' 4. the thrust of the case of the applicant is that the cost of technical know how could not be required to be included in the assessable value of the final product. the problem has arisen due to the order-in-original on remand has been passed on 30.12.2002. the rom has been filed on 6.1.2003. when the matter came up for hearing, a preliminary objection has been taken by the learned departmental representative that when the tribunal has passed the order on 9.4.2001 which was certified as c-ii/1198-99/wzb/2001 dated 28.4.2001, the provisions relating to section 35c(2) of the central excise act enabled any party to file an application for rectification of mistakes which appear on the face of the order passed by the tribunal within four years of passing the order. however, it is argued by the learned departmental representative that by amendment made on 11.5.2002 in clause 134 of the finance bill of 2002, the period of limitation has been substituted for the words 'four years' to 'six months'. it is therefore argued by the departmental representative that the appeal having been disposed of in april 2001 the application for rectification of the mistake having been filed in january 2003 is hopelessly barred by limitation. as far as the merit is concerned, the learned departmental representative argued that if there is any mistake this is not a case where it can be treated as a mistake within the meaning of section 35c(2) of the central excise act but an error which could be rectified only by an appellate forum. this is more so when the deputy commissioner to whom the matter has been remanded has passed order-in-original dated 30.12.2002.5. as against this, learned senior counsel, shri e.p. bharucha appearing along with shri m.p. baxi and shri a. sheerazi, advocates appearing for the applicant, contended before us that the preliminary objection of the learned departmental representative must be rejected outright. it is the contention of the applicant before us that when in april, 2001 final order in the appeal has been made disposing of the appeal, nobody could have envisaged with a certain amount of even clairvoyance that a subsequent finance bill to be introduced in february, 2002 and that there would be reduction of time limit for filing application for rectification of mistakes. it is also pleaded by the applicant that an appeal being a vested right, whatever rights which the appellant had at the time of institution of the appeal would be continued to beheld by such appellant meaning thereby the period of limitation which was in existence at the time of filing of the appeal before the tribunal can never be taken away unless the legislature itself removes that right by specific words to that effect in the amendment act. the argument of the learned senior counsel for the applicant is that the litigation which was instituted by means of an appeal in the tribunal carries with it certain rights to such appellant like filing of a reference application in the high court under certain circumstances, filing of an appeal directly to the supreme court under certain circumstances and equally filing of an application for rectification of mistake under certain circumstances. it is also stated that a bare reading of paragraph 15 and 16 of the application would show that the inevitable conclusion would be that there is an apparent clerical or a mistake which is so apparent that such a mistake need not be found out by a convoluted reason or by convoluted or circuited reasoning. the moment a person sees paragraph 8 of the impugned order, he may come to a conclusion that a mistake regarding inclusion of the head "technical know how" for the purpose of valuation of an excisable product. for this purpose, the learned senior counsel relies on several judgments. the first case he relies on is the judgment of the division bench of the bombay high court in the case of universal drinks pvt.ltd. v. uoi 1984 (18) elt 207 where in paragraphs 10, 11, & 12, it has been held as follows:- "10. a bare reading of rule 11, whether old or new, clearly negatives the construction that a substantive right to refund is created thereunder. the right to refund, in our view is a common law right of the assessee to recover back the amount of excise duty which is either illegally levied upon him or wrongly paid by him or recovered from him by the excise officer. it is worthwhile to notice the provisions of section 72 of the contract act, which casts an obligation upon the person who has received the money under a mistake to repay the same to the person from whom it is received. the claim for refund of the duty arises as soon as the duty is illegally recovered by the excise officers or is wrongly paid by the assessee. 11. in these petitions, it is clear that the payment of the excise duty, of which refund is claimed, is made and a right to refund thereof arose prior to 6-8-1977 i.e. the date on which the new rule 11 which has accrued to the petitioner prior to new rule 11 or at any rate is an existing right. it is a settled principle of interpretation of statutes that a vested right or even an existing right, including a right of action is not affected or allowed to be taken away unless it is so affected or taken away by the enactment expressly or by necessary implication. it is only a declaratory or a procedural enactment which is normally held to be retrospective. a remedial act, on the contrary, is not necessarily retrospective, it may be either enlarging or restraining and it takes effect prospectively, unless it has retrospective effect by express terms or necessary intendment. [see air 1960 s.c. 12 (para 29) - the central bank of india and ors. v. their workman and also air 1973 s.c. 1227 - the workmen of firestone tyre and rubber co. of india p. ltd. v. the management and ors.]. it is, therefore, necessary to be seen whether the provisions of new rule 11 can be held to be retrospective so as to affect the existing or the vested right which has assured to the petitioner prior to the said rule. 12. in our view, the new rule 11 is clearly prospective in its operation in the sense that it will apply to the cases in which the right to claim refund has arisen after it came into force. this view is supported by the language of the new rule 11 itself. the said rule provides a limitation for making an application which is six months from the date of payment of duty. if the said rule was intended to apply to claims of refund prior to its coming into force, in many cases the claims would be barred by limitation because the limitation of six months is to be computed from the date of payment of duty. it is useful to notice at this stage that whatever may be the interpretation of the new rule 11, on the question whether it enacts complete code in itself on the matters relating to refund of duty, the old rule 11 did not enact a complete code but provided only for certain contingencies such as payment through inadvertence, error or a mis-construction and as held in several decisions, a civil suit or a writ petition under article 226 could always be filed for refund of any duty illegally or wrongfully recovered or wrongly paid by an assessee under a mistake. in such cases, where the assessee waited for the suit to be filed, or a writ petition to be preferred, which could be done by him normally within the period of three years, as the limitation for civil suit was three years from the date of knowledge of the mistake, the said claim would be barred by limitation in some cases even before new rule 11 came into force if the limitation of six months prescribed thereunder to be computed from the date of payment of duty were to be made applicable. there is no provision made in the new rule 11 that such claims could be preferred within the stipulated period from the date of application of the said rule. a right to a suit is itself a vested right and in the absence of clear provisions or clear intendment the said right cannot be allowed to be taken away by the provisions of the new rule 11. looked at it from another angle, there is no provision in the new rule 11 that the claims which are barred by limitation of three months under the old rule 11, can be preferred under the new rule 11 if they are within six months from the date of payment of duty as provided thereunder." 6. the next case which the senior counsel relies on is the judgment of the supreme court in the case of garikapati veeraya v. n. subbiah choudhary and ors. air 1957 sc page 540 where in paragraph 23 the supreme court has held as follows:- "23. "from the decisions cited above the following principles clearly emerge: (i) that the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. (ii) the right of appeal is not a mere matter of procedure but is a substantive right. (iii) the institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the carrier of the suit. (iv) the right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) this vested right of appeal can be taken away only by a subsequent enactment, if so provides expressly or by necessary intendment and not otherwise." 7. the learned single counsel also cited the judgment of the full bench of the madras high court reported in air 1916 mad. 912 (rajah of pittapur v. gani venkata subba row and ors.) wherein the leaned chief justice has held as follows:- "wallis, c.j. - i think that sadasiva aiyar j. was right in following the carefully considered judgment of benson and sundara aiyar, jj., in ramakrishan chetti v. subbraya ayyar and that the principle to be applied is that where an act contains provisions for the limitation of suits which take away altogether a vested right of suit without providing any equivalent remedy, then according to the approved rule of construction, the provisions must be considered to have been enacted subject to the implied exception that they were not to extend to such vested rights of suit which were to continue subject to the rules of limitation in force at the passing of the act. kumaraswami sastri, j. - it is well known rule of construction that retrospective operation ought not to be given to a statute as to take away vested rights rules that effect cannot be avoided without doing violence to the language of the enactment, and that except in special cases the new law ought to be construed so as to interfere as little as possible with vested rights. the correct rule seems to me to be that though laws affecting limitation might abridge or enlarge periods of limitation in cases of suits or causes of action which were alive at the dat when the new enactment came into force and which under the old law would expire afterwards, the change cannot, unless there is clearly expressed intention to the contrary, either by apt words in the enactment or otherwise, be retrospective so as to destroy rights of suits which were alive on the date." the above observation of wallis, c.j. was agreed to by justice kumaraswami as is clear from the above observations made by the learned judge. the learned senior counsel also invited our attention to the observations of g.p. singh in the book principles of statutory interpretation, 7^th edition, at pages 380 and 381 where the learned author has observed as follows:- statutes of limitation are regarded as procedural and the law of limitation which applies to a suit is the law in force at the date of the institution of the suit irrespective of the date of accrual of the cause of action. the object of a statute of limitation is not to create any right but to prescribe periods within which legal proceedings may be instituted for enforcement of rights which exist under the substantive law. but, after expiry of the period of limitation, the right of suit comes to an end, therefore, if a particular right of action had become barred under an earlier limitation act, the right is not revived by a later limitation act even if it provides a larger period of limitation than that provided by the earlier act. on the sample principle, if right to execute a decree or judgment gets barred under an earlier act, the right is not revived by a later act. when the later act provides a shorter period of limitation than that provided by the earlier act, a right of suit, which is subsisting according to the earlier act on the date when the later act comes into operation, will not be taken to be extinguished. if there is still time even on the basis of the later act within which such a suit can be filed, the right has to be availed of within that period, and the benefit of the earlier act is not available. condonation of delay in such cases is filing the suit or claim will be governed by the provisions of the later act and not by the provisions of the earlier act. but if the shorter period provided in the later act had already expired on the date of its enforcement, the suit can be filed within a reasonable time after the commencement of the later act, otherwise the effect of the later act would be to extinguish a subsisting right of suit, an inference which cannot be reached except from express enactment or necessary implication. to avoid these complications when a later limitation act enacts shorter period, it is usual to postpone is coming into effect for some reasonable time, or to make provision for a time gap within which the benefit of the earlier act can be taken. statutes of limitation are thus retrospective in so far as they apply to an illegal proceedings brought after their operation for enforcing causes of action accrued earlier, but they are prospective in the sense that they neither have the effect of reviving a right of action which is already barred on the date of their coming into operation, nor do they have the effect of extinguishing a right of action subsisting on that date. but a statute may, expressly or impliedly by retrospectively extending limitation, revive a barred claim." 8. the sum and substance of the learned senior counsel's argument is that the instant application for rectification is filed only for clarifying the position of the inclusion of the technical know how in the valuation of the goods for purpose of calculation and payment of duty.9. as against this, learned departmental representative only emphasises the fact that the present application has been filed only after the order passed by the adjudicating authority on remand. if the appellant is aggrieved, he should file an appeal to the commissioner (appeals), not rectification of mistake application directly to the tribunal.10. at the outset, it has to be stated that in the instant case, the appeals of the assessee as well as the department against the order of the commissioner (appeals) made on 13.7.1994 was passed by us, as stated earlier, on 9.4.2001. at that time, the provisions of section 35c(2) of the central excise act made it very clear that any person who intends to file an application for rectification of any mistake apparent from the records, viz.the order passed by the tribunal can be filed within four years from the date of such order. in the instant case, the application has been filed on 7.1.2003. in between when the remand order of the commissioner (appeals) dated 13.7.1994 was taking into effect, a letter was written by the lower authority on 12.12.2002 which is reproduced below:- ""kindly refer to your letter f. no. wdu/dated 11-12-2002 received in this office on 12-12-2002 on the above subject. in this connection, this is to inform you that all the submissions/cost reports/any other information relating to determination of cost, supplied by you so far (alongwith the hon'ble cegat's decision dated 28-04-2001) has been put before the asst. director (costs) central excise for his opinion as to whether the information supplied by you is sufficient to decide the matter in terms of hon'ble cegat's order. the asstt. director (costs) central excise opined that the matter cannot be verified for sole reason that the following information is required to be supplied by you. it was observed that- (1) as per cegat's order dated 28-04-2001, vide para 8 the cost of technical know-how provided by m/s cadbury was to be included in the cost of manufacture. however, the cost sheets and supporting documents submitted by you do not reflect the inclusion of technical know-how charges. thus, details of such technical know-how charges have to be provided by you. please do the needful. (2) the cost sheets and supporting working sheets so submitted by you mention that r.m. & p.m. has been taken from cost sheet certified by mr. medhekar dated 21-03-1995. this cannot be considered as source document for finalisation of value. accordingly, you are requested to please prepared and submit the cost sheet on the basis of base documents like ledger a/c, purchase register, invoices etc. such source documents are also required to be provided by you for test verification purpose. (3) the inward transport charges appears to be not included in the cost. details of such charges may please be supplied. (4) cost of insurance for raw materials etc. was to be borne by m/s cadbury. however, in this worksheet this expenditure is not shown separately. this aspect may be examined by you and amount of such expenditure not included may please be furnished by you. (5) the source documents/records in support of conversion charges may also kindly be provided. i have thoroughly gone through your letter no. wdu/dated 11-12-2002 and find that you are under wrong impression that the information is being called for delaying the matter. please note that the department is interested n finalising the matter and in abiding by the orders of hon'ble cegat. however, this can be finalised with your co-operation only because the information called for under this office letter dated 10-12-2002 and as pointed out by asstt. director (costs) central excise has to be submitted by you immediately. though in your above letter you have stated that all information submitted, it is not a fact. however, you may point out specifically stating under which letter the above information is submitted, if at all submitted. you are once again requested to kindly submit the information called for in order to finalise the issue before stipulated time, preferably within two days from the date of receipt of this letter. your esteemed co-operation will be highly appreciated.the adjudicating authority on remand has understood the tribunal's order in one way or the other way. whether that is correct or not, i cannot pass order at this juncture, but an application under section 35c(2) filed by the applicant has to be looked into.11. the preliminary objection taken by the departmental representative is that the application is barred by limitation. the amendment made to the central excise act has been introduced by form of finance bill which culminated in passing of finance act some time in may, 2002. if a person who is aggrieved with the order passed by the tribunal, could he have filed an application for rectification of mistake which is apparent on the face of the record. let us assume that in this case, can the applicant file the application within six months of the order? in our view, he could not have filed it. our order has been made in april, 2001. if we reckon six months from that date, it ends with 5^th october, 2001 when the amended act was never in force. can we make this type of interpretation of the finance act, 2002 so as to deprive those appellants whose appeals have been disposed of by the tribunal in 2001? in our view, such an interpretation would not be warranted in the fats of the case. as stated earlier, nobody could have with a reasonable foresight thought that in respect of time limit within which an application for rectification of mistake should be filed within six months of the order. this is a right given to all the appellants. in fact in the earlier of the order, we have referred to the right of an appellant who is aggrieved by an order passed by the tribunal, namely filing of a reference application in the high court or an appeal to the supreme court under certain circumstances. some persons may even file a writ application under article 226 of the constitution. these are all the rights inhered to a litigant in terms of the specific provisions of the central excise act and the constitution of india. a litigant who initiates a litigation in the form of an appeal to the tribunal has certain rights which cannot be taken away unless by legislation stating to that in a clear terms.12. the temptation which one person may jump to the conclusion that limitation is a procedural one has been succinctly explained by the learned author, g.p. singh, in the principles of statutory interpretation where the leaned author has specifically stated that when the later act provides a shorter period of limitation than that provided by the earlier act, a right of suit which is subsisting according to the earlier act on the date act will not be taken to be extinguished. he refers to the judgment of the supreme court in the case of new india assurance co. ltd. v. smt. shanti misra 1975 (2) scc 840, which is extracted below:- "whether accidents had occurred prior to the constitution of the claims tribunal and no suit had been filed in the civil court, the vested right of action was not meant to be extinguished. the change in law was merely a change of forum i.e. a change of adjectival or procedural law and not of substantive law. such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. he will have a vested right of action but not a valid right of forum. if by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away. otherwise the general rule is to make a retrospective. the expression "arising out of an accident: occurring in sub-section (1) and "over the area in which the accident occurred", mentioned in sub-section (2) in section 110a show that the change of forum was meant to be operative retrospectively irrespective of the fact as to when the accident occurred. primarily the law engrafted in section 110a and 110f is a law relating to change of forum and it is not reasonable and proper to allow the law of change of forum to give way to the bar of limitation provided in sub-section (3) of section 110a. it must be vice versa. the change of the procedural law of forum must be given effect to. taking recourse to the proviso appended to sub-section (3) of section 110a for excusing the delay made in the filing of the application between the date of the accident and the date of the constitution of the tribunal is not correct, section 5 of the limitation act, 1963 or the proviso to sub-section (3) of section 110a of the act are meant to condone the default of the party on the ground of sufficient cause. but if a party is not able to the file an application for no fault of his but because the tribunal was not in existence, it will not be a case where it can be said that the "applicant was prevented by sufficient cause from making the application in time" within the meaning of the proviso. the time taken between the date of the accident and the constitution of the tribunal cannot be condoned under the proviso. however the application is not barred by sub-section (3) of section 110a for the following reasons: (1) time for the purpose of filing the application under section 110a did not start running before the constitution of the tribunal time had started running for the filing of the suit but before it had expired the forum was changed. and for the purpose of the changed forum, time could not be deemed to have started running before a remedy of going to the new forum is made available. (2) even though by and large the law of limitation has been held to be a procedural law, there are exceptions to this principle. generally the law of limitation which is in vogue on the date of the commencement of the action governs it. but there are certain exceptions to this principle. the new law of limitation providing a longer period cannot revive a dead remedy. nor can it suddenly extinguish vested right of action by providing for a shorter period of limitation. amendment of the law of limitation could not destroy the plaintiff's right of action which was in existence when the act came into force. giving retrospective effect to the change of law in relation to the forum, in the context of the object of the change, is imperative. that being so the principles aforesaid for overcoming the bar of limitation will be applicable. the jurisdiction of the civil court is ousted as soon as the claims tribunal is constituted and the filing of the application before the tribunal is the only remedy available to the claimant. so that an application can be filed within a reasonable time of the constitution of the tribunal, which ordinarily and generally, would be the time of limitation mentioned in sub-section (3). if the application could not be made within that time from the date of the constitution of the tribunal, in a given case, the further, time taken in the making of the application may be held t be reasonable time on the facts of that case for the making of the application or the delay made after the expiry of the period of limitation provided in sub-section (3) from the date of the constitution of the tribunal can be condoned under the proviso to that sub-section. on facts, the remedy available to the respondents was to go before the claims tribunal and since the law was not very clear on the point, the time of about four months taken in approaching the tribunal after its constitution can be held to be either a reasonable time or the delay of less than 2 months could well be condoned under the proviso to sub-section (3) of section 110a." one may be tempted to state that in this case, it is not a suit but an application for rectification of mistake. the instant application and the suit may be poles apart but can we show a blind eye to the situation here. what will happen to those litigants who have instituted appeals before the tribunal and whose appeals have been disposed of in april, 2001 can we hold that they do not have the right of filing the rectification of mistake application. in our view, the preliminary objection raised by the learned department representative has to be rejected, firstly because the judgment of the bombay high court in universal drinks pvt. ltd. (supra) clearly clinches the issues in paragraphs 10, 11 & 12 which we have referred to in earlier portion of this order. moreover, even if one has to state that the suit which is referred to in the case of new india assurance may be different from the application for rectification, but yet the principle which is applicable to suit will hold good here. if their right of filing the rectification of mistake apparent on the record is extinguished for these types of litigants, the others whose case have been disposed of subsequently, they will have right to keep their rights intact, namely the right to file their application for rectification of mistake, whereas the appellant whose appeal has been disposed of in april, 2001 would be denied. that could not be the intention of the parliament unless the parliament by the necessary enactment says so specifically.we are not competent to say anything about as to whether the parliament could negate the right of the appellant on the touchstone of article 14 of the constitution because that power only high court could exercise under article 226 of the constitution, or the supreme court exercise that power under article 32 of the constitution. but we are deciding the case as a member of the tribunal which is a creature of statute and i do not have the same powers. following the principle which the bombay high court has held in the above case of universal drinks as well as the decision of the madras high court referred to above in the case of rajah of pittapur. the supreme court in the case cited above has also said a right of appeal is not a mere matter of procedure but a substantive right carrying with it that all rights of appeal then in force or were preserved to the parties thereto till the rest of the career of the suit and it is considered as a vested right.13. this takes us to the judgment of the supreme court in the case of osram surya (p) ltd. v. cce 2002 (50) rlt 129 referred to by the departmental representative during the argument, where in paragraph 7, the supreme court has held as follows:- "7. having heard the arguments of the parties and after considering the rule in question, we think that by introducing the limitation in the said proviso to the rule, the statute has not taken away any of the vested rights which had accrued to the manufacturers under the scheme of modvat. that vested right continues to be in existence and what is restricted is the time within which the manufacturer has to enforce that right. the appellants, however, contended that imposition of a limitation is as goods as taking away the vested right. in support of their arguments they have placed reliance on a judgment of this court in eicher motors ltd. v. union of india [1999 (106) e.l.t. 3 (s.c.)] wherein this court had held that a right accrued to an assessee on the date when it paid the tax on the raw-materials or the inputs would continue until the facility available thereto gets worked out or until those goods existed. in that background, this court held that by section 37 of the act, the authorities concerned cannot make a rule which could take away the said right on goods manufactured prior to the date specified in the concerned rule. in the facts of eicher's case (supra), it is seen that by introduction of rule 57f (4a) to the rules, a credit which way lying unutilized on 16-3-1995 with the manufacturer was held to have lapsed. therefore, that was a case wherein by introduction of the rule a credit which was in the account of the manufacturer was held not to be available on the coming into force of that rule, by that the right to credit itself was taken away, whereas in the instant case by the introduction of the second proviso to rule 57g, the credit in the account of a manufacturer was not taken away but only the manner and the time within which the said credit was to be taken or utilized alone was stipulated. it is to be noted at this juncture that the substantive right has not been taken away by the introduction of the proviso to the rule in question but a procedural restriction was introduction which, in our opinion, is permissible in law. therefore, in our opinion, the law laid down by this court in eicher's case (supra) does not apply to the facts of these cases. this is also the position with regard to the judgment of this court in collector of central excise, pune and ors. v. dai ichi karkaria ltd. and ors.14. reading the above paragraph, one may be tempted to state that the imposition of limitation is restriction in the matter of enforcement of the right. as stated earlier, in april 2001, the appellant could not have foreseen what is to be happened in 2002. the judgment of the supreme court in the above case, in the peculiar circumstances of this case, will not be applicable. we would therefore hold, on the facts and circumstances of this case, that the instant application is not barred by limitation.15. this takes us to the other question, viz. whether the instant application is to be accepted on merits. the reason why the instant application has been made is reflected in paragraph 15 and 16 of the application reproduced in paragraph 3 of the order. in paragraph 16 of the application, it has been stated that there may be an ambiguity in the last two sentences occurring in paragraph 8 of our order dated 9.4.2001 which we reproduce below:- "8. we will now proceeded to consider the elements of value that are included by the collector which are challenged by warana. the first of these is the cost of technical know-how provided by cadbury to warana and what is described as cost of goodwill. by technical know-how is meant the information that governs the process of manufacture exactly what proposition of what ingredients is to be used, and at what stage in manufacture, and the exact processes to which these are to be subjected. the cost of technical know-how therefore would generally form part of the cost of manufacture. such cost would however not includible in the cost relating to technical know-how would hence not form part of the assessable value." in the instant case, the applicant worked as a job worker after having an understanding with the company called cadbury india ltd. thereby the applicant had to manufacture bournvita using the two materials and packing materials supplied by the said cadbury india ltd. as per the recipe and specification given by the said cadbury india ltd. the relationship between the job worker and the person who gives the raw material is reflected in paragraph 30 of the judgment of the supreme court in the case of ujagar prints v. uoi 1988 (38) elt 535 at page 544, which is reproduced below. "30. in the case of processing-houses, they become liable to pay excise duty not because they are the owners of the goods but because they cause the 'manufacture' of the goods. the dimensions of the section 4(1)(a) and (b) are fully explored in a number of decisions of this court. reference may be made to the case of bombay tyres international. consistent with the provisions of section 4 and the central excise (valuation) rules, 1975, framed under section 37 of the act, it cannot be said that the assessable value of the processed fabric should comprise only of the processing-charges. this extreme contention if accepted, would lead to and create more problems than it is supposed to solve; and produce situations which could only be characterised as anomalous. the incidence of the levy should be uniform, uniformed by fortuitous considerations. the method of determination of the assessable value suggested by the processors would lead as to the untenable position that while in one class of grey-fabric processed by the same processor on bailment, the assessable-value would have to be determined differently dependent upon the consideration that the processing-house had carried out the processing operation on job-work basis, in the other class of cases, as it not unoften happens, the goods would have to be valued differently only for the reason the same processing-house has itself purchased the grey-fabric and carried out the processing operations on its own." the owners of the raw material, viz. cadbury india ltd. no doubt gives the same to the appellants. there cannot be any tax on transfer or the ownership of the raw material. the duty is imposed or levied on only the activity of manufacture. the judgment of the supreme court in the case of empire industries ltd. and ors. v. uoi and ors. 1985 (20) elt 179. at paragraph 48 of this judgment, it has been stated that "the fact that the petitioners are not the owners of the end product is irrelevant. taxable event is manufacture - not ownership." this view has been upheld by the constitution bench of the supreme court in the above said case of ujagar prints at page 554 at paragraph 31 where the supreme court held that on consideration of the matter, the view taken in the empire industries case did not call for reconsideration. in the subsequent paragraph it was specifically held that the union of india and its authorities shall be entitled to recover the amounts due by way of arrears of excise duty. but here the question is about the items includable for purpose of valuation of the end product. here the technical know how is regarding manner of producing the end product. it is like a recipe. it is never transferred from cadbury india ltd. the end product is manufactured. all these statements are only reiteration of what is already in existence before us. the two sentences mentioned in paragraph 8 of our order may lead to certain confusion. that is why we are rectifying or correcting the error which has been manifestly crept in the judgment. we are not arriving at such a decision in a circuitous way. nor are we arriving at the decision in a review or appeal by disguise. the same thing is reflected in the order only for purpose of elucidation. the technical know is never transferred because in all the job work, there is no transfer of any raw material from the raw material supplies to the job worker. this has been explained by the judgments of the supreme court in the above two cases. we are therefore of the view that the applicant has made out the case and the rectification application stands allowed. the last two sentences of paragraph 8 of our order would stand deleted.16. this takes us to one other important point which the learned departmental representative has touched. he states that the order-in-original on remand has been passed on 30.12.2002. therefore the party if he is aggrieved ought to have filed an appeal to the proper forum and cannot forgleap as an appeal to the tribunal. this is an interesting argument made by the learned departmental representative. at a first blush, the argument appears to be logical, but when we look into the real issue, it will be noted that the order-in-original dated 30.12.2002 has been passed on the our order dated 28.4.2001. by the instant order, we have corrected or rectified the mistake in the said order dated 28.4.2001. therefore the basis on which the order-in-original has been passed by the adjudicating authority has been rectified. therefore the argument of the learned departmental representative cannot be accepted.17. for this purpose, it will be useful to refer to the decision of the three-member bench of the tribunal in the case of cce, madras v. ashok leyland limited 1987 (29) elt 530 where under more or less similar circumstances in dealing with a refund, the tribunal held that these types of arguments of the department has been rejected. paragraphs 4, 8(1) and 8(4) of the said decision have been quoted for easy appreciation. "4. the assistant collector held in his order-in-original dated 29-11-1975 that main dealers as well as sub-dealers of the respondents were related persons. he ordered assessment to be made on the basis of the retail sales price charged by the sub-dealers. in appeal, the appellate collector, agreed that the main dealers were related persons but directed the assistant collector to re-examine whether sub-dealers could be treated as non-related persons. in remand, the assistant collector passed another order on 12-4-1977 in which he accept the uniform discount of rs. 1500/- given by main dealers to sub-dealers but disallowed the over-riding commission given by the respondents to their main dealers in the case of supplies made by the respondents directly to government department etc. not satisfied with the appellate collector's order, the respondents filed a revision application to the central government. the central government confirmed that main dealers were related persons but accepted the price charged by the main dealers to sub-dealers. all the clearances were consequently assessed uniformly on the price charged by the main dealers to sub-dealers, irrespective of the category of sales. the respondents persisted in their point that their main dealers were not related persons and took the matter to the high court of madras by way of writ petition and sought the writ of certiorari. a learned single judge of the madras high court allowed the writ in favour of the respondents on 28-9-1981. the department filed an appeal before the division bench of the high court, which was dismissed on 7-12-1982 [1983 e.l.t. 2168 (madras)]. the union of india filed a special leave petition before the supreme court, which was also dismissed on 25-11-1983. 8(1) the learned representative of the judgment stressed time and again that the respondents had not filed an appeal against the assistant collector's order dated 12-4-1977 passed in remand proceedings and the said order, therefore, became final. we do not agree. once the order-in-appeal, which directed remand to the assistant collector, itself was appealed against, first before the central government and then before the high court, in was not necessary for the respondents to file a separate appeal against the order dated 12-4-1977 of the assistant collector passed in remand. in any case, now that the respondents have conceded the department's point relating to sales to government bodies and departments etc., there is practically no substance left in this point of the department. 8(4) finally, the learned representative of the department contended that retail sales and removals for captive use were not the subject matter of original adjudication by the assistant collector and hence the assessments made in these cases had become final and it was not open to the respondents to bring them up at the time of claiming consequential refund. we do not agree. once the normal price under section 4(1)(a) had been finally determined at the level of the supreme court, assessments of all categories to which such normal price should apply would have to be re-opened. we have already stated that removals for captive use and for retial sales had to be assessed at the normal price available at the time and place of removal under section 4(1)(a)."

Judgment:
1. In this matter, an application has been filed for rectification of mistake under Section 35C(2) of the Cental Excise Act, which was apparent on the record to rectify the defects in the Order dated 28.4.2001 passed by the Tribunal in Appeals E/2110/94 and E/496/95. The application arises in this way.

2. The applicant manufactured malted foods at their plant at Amrutnagar, Maharashtra. They had an understanding with a company called Cadbury India Ltd. whereby the applicant had to manufacture Bournvita (final product) using the raw materials and packing materials supplied by the said Cadbury India Ltd. as per the recipe and specification given by the said Cadbury India Ltd. The applicant would be paid Rs. 3.75 per kg. for this activity. Show cause notice dated 21.10.1992 was issued to both Warana Sahakari Dudh Utpadak Prakriya Sangh Ltd. and Cadbury India Ltd. calling upon them to show cause why differential duty amounting to Rs. 1,01,20,771/- being the duty calculated on Cadbury products should not be recovered from them. The Assistant Commissioner confirmed the order. When the appeal was filed to the Commissioner (Appeals), the Commissioner (Appeals), after referring to the judgment of the Supreme Court in the case of Ujagar Prints 1999 (39) ELT 493, held that the manufacturer of the product was not Cadbury India Ltd. but the applicant Warana. However, the Commissioner (Appeals) held, "Transport expenses of the Cadbury employees + rent for the free office accommodation provided to the Cadbury personnel + rent for godowns taken for storing of raw material + cost of technical know how provided free to the appellants + cost of goodwill. The matter is therefore, remanded back to the Assistant Collector to determine the assessable value in the manner cited above." Against this order, the department as well as the appellant filed appeals. That is why two appeal numbers have been given. The department filed appeal E/2114/94 and the applicant filed E/496/95. By our order dated 9.4.2001, we had allowed the applicant's appal in part and dismissed the appeal of the department. In paragraph 8 of the said order, we had held as follows:- "8. We will now proceed to consider the elements of value that are included by the Collector which are challenged by Warana. The first of these is the cost of technical know-how provided by Cadbury to Warana and what is described as cost of goodwill. By technical know-how is meant the information that governs the process of manufacture exactly what proportion of what ingredients is to be used, and at what stage in manufacture, and the exact processes to which these are to be subjected. The cost of technical know-how therefore would generally form part of the cost of manufacture. Such cost would however not includible in the cost relating to technical know-how would hence not form part of the assessable value." 3. The present application has been filed by the assessee stating at paragraphs 15 and 16 of the application as follows:- "(15) It is submitted that the said error is manifest upon a plan reading of the following sentences occurring in para 8 of the said Order: "The cost of technical know-how therefore would generally form part of the cost of manufacture. Such cost would however not includible in the cost relating to technical know-how would hence not form of the assessable value." (16) It is submitted that there appears to be an omission and/or typographical error in the second sentence, which might lend itself to an ambiguity in interpretation thereof, thus leaving the reader in doubt as to whether the cost of technical know-how is required to be included in the assessable value of the final product.' 4. The thrust of the case of the applicant is that the cost of technical know how could not be required to be included in the assessable value of the final product. The problem has arisen due to the Order-in-Original on remand has been passed on 30.12.2002. The ROM has been filed on 6.1.2003. When the matter came up for hearing, a preliminary objection has been taken by the learned departmental representative that when the tribunal has passed the order on 9.4.2001 which was certified as C-II/1198-99/WZB/2001 dated 28.4.2001, the provisions relating to Section 35C(2) of the Central Excise Act enabled any party to file an application for rectification of mistakes which appear on the face of the order passed by the Tribunal within FOUR YEARS of passing the order. However, it is argued by the learned departmental representative that by amendment made on 11.5.2002 in Clause 134 of the Finance Bill of 2002, the period of limitation has been substituted for the words 'four years' to 'six months'. It is therefore argued by the departmental representative that the appeal having been disposed of in April 2001 the application for rectification of the mistake having been filed in January 2003 is hopelessly barred by limitation. As far as the merit is concerned, the learned departmental representative argued that if there is any mistake this is not a case where it can be treated as a mistake within the meaning of Section 35C(2) of the Central Excise Act but an error which could be rectified only by an appellate forum. This is more so when the Deputy Commissioner to whom the matter has been remanded has passed Order-in-Original dated 30.12.2002.

5. As against this, learned Senior Counsel, Shri E.P. Bharucha appearing along with Shri M.P. Baxi and Shri A. Sheerazi, Advocates appearing for the applicant, contended before us that the preliminary objection of the learned departmental representative must be rejected outright. It is the contention of the applicant before us that when in April, 2001 final order in the Appeal has been made disposing of the appeal, nobody could have envisaged with a certain amount of even clairvoyance that a subsequent Finance Bill to be introduced in February, 2002 and that there would be reduction of time limit for filing application for rectification of mistakes. It is also pleaded by the applicant that an appeal being a vested right, whatever rights which the appellant had at the time of institution of the appeal would be continued to beheld by such appellant meaning thereby the period of limitation which was in existence at the time of filing of the appeal before the Tribunal can never be taken away unless the legislature itself removes that right by specific words to that effect in the amendment act. The argument of the learned Senior Counsel for the applicant is that the litigation which was instituted by means of an Appeal in the Tribunal carries with it certain rights to such appellant like filing of a Reference Application in the High Court under certain circumstances, filing of an appeal directly to the Supreme Court under certain circumstances and equally filing of an application for rectification of mistake under certain circumstances. It is also stated that a bare reading of paragraph 15 and 16 of the application would show that the inevitable conclusion would be that there is an apparent clerical or a mistake which is so apparent that such a mistake need not be found out by a convoluted reason or by convoluted or circuited reasoning. The moment a person sees paragraph 8 of the impugned order, he may come to a conclusion that a mistake regarding inclusion of the head "technical know how" for the purpose of valuation of an excisable product. For this purpose, the learned Senior Counsel relies on several judgments. The first case he relies on is the judgment of the Division Bench of the Bombay High Court in the case of Universal Drinks Pvt.

Ltd. v. UOI 1984 (18) ELT 207 where in paragraphs 10, 11, & 12, it has been held as follows:- "10. A bare reading of Rule 11, whether old or new, clearly negatives the construction that a substantive right to refund is created thereunder. The right to refund, in our view is a common law right of the assessee to recover back the amount of excise duty which is either illegally levied upon him or wrongly paid by him or recovered from him by the excise officer. It is worthwhile to notice the provisions of Section 72 of the Contract Act, which casts an obligation upon the person who has received the money under a mistake to repay the same to the person from whom it is received.

The claim for refund of the duty arises as soon as the duty is illegally recovered by the Excise Officers or is wrongly paid by the assessee.

11. In these petitions, it is clear that the payment of the excise duty, of which refund is claimed, is made and a right to refund thereof arose prior to 6-8-1977 i.e. the date on which the new Rule 11 which has accrued to the petitioner prior to new Rule 11 or at any rate is an existing right. It is a settled principle of interpretation of statutes that a vested right or even an existing right, including a right of action is not affected or allowed to be taken away unless it is so affected or taken away by the enactment expressly or by necessary implication. It is only a declaratory or a procedural enactment which is normally held to be retrospective. A remedial Act, on the contrary, is not necessarily retrospective, it may be either enlarging or restraining and it takes effect prospectively, unless it has retrospective effect by express terms or necessary intendment. [See AIR 1960 S.C. 12 (para 29) - The Central Bank of India and Ors. v. Their Workman and also AIR 1973 S.C. 1227 - The Workmen of Firestone Tyre and Rubber Co. of India P. Ltd. v. The Management and Ors.]. It is, therefore, necessary to be seen whether the provisions of new Rule 11 can be held to be retrospective so as to affect the existing or the vested right which has assured to the petitioner prior to the said rule.

12. In our view, the new Rule 11 is clearly prospective in its operation in the sense that it will apply to the cases in which the right to claim refund has arisen after it came into force. This view is supported by the language of the new Rule 11 itself. The said rule provides a limitation for making an application which is six months from the date of payment of duty. If the said rule was intended to apply to claims of refund prior to its coming into force, in many cases the claims would be barred by limitation because the limitation of six months is to be computed from the date of payment of duty. It is useful to notice at this stage that whatever may be the interpretation of the new Rule 11, on the question whether it enacts complete code in itself on the matters relating to refund of duty, the old Rule 11 did not enact a complete code but provided only for certain contingencies such as payment through inadvertence, error or a mis-construction and as held in several decisions, a civil suit or a writ petition under Article 226 could always be filed for refund of any duty illegally or wrongfully recovered or wrongly paid by an assessee under a mistake. In such cases, where the assessee waited for the suit to be filed, or a writ petition to be preferred, which could be done by him normally within the period of three years, as the limitation for civil suit was three years from the date of knowledge of the mistake, the said claim would be barred by limitation in some cases even before new Rule 11 came into force if the limitation of six months prescribed thereunder to be computed from the date of payment of duty were to be made applicable. There is no provision made in the new Rule 11 that such claims could be preferred within the stipulated period from the date of application of the said rule. A right to a suit is itself a vested right and in the absence of clear provisions or clear intendment the said right cannot be allowed to be taken away by the provisions of the new Rule 11. Looked at it from another angle, there is no provision in the new Rule 11 that the claims which are barred by limitation of three months under the old Rule 11, can be preferred under the new Rule 11 if they are within six months from the date of payment of duty as provided thereunder." 6. The next case which the Senior Counsel relies on is the judgment of the Supreme Court in the case of Garikapati Veeraya v. N. Subbiah Choudhary and Ors. AIR 1957 SC page 540 where in paragraph 23 the Supreme Court has held as follows:- "23. "From the decisions cited above the following principles clearly emerge: (i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.

(ii) The right of appeal is not a mere matter of procedure but is a substantive right.

(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the carrier of the suit.

(iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal.

(v) This vested right of appeal can be taken away only by a subsequent enactment, if so provides expressly or by necessary intendment and not otherwise." 7. The learned Single Counsel also cited the judgment of the Full Bench of the Madras High Court reported in AIR 1916 Mad. 912 (Rajah of Pittapur v. Gani Venkata Subba Row and Ors.) wherein the leaned Chief Justice has held as follows:- "Wallis, C.J. - I think that Sadasiva Aiyar J. was right in following the carefully considered judgment of Benson and Sundara Aiyar, JJ., in Ramakrishan Chetti v. Subbraya Ayyar and that the principle to be applied is that where an Act contains provisions for the limitation of suits which take away altogether a vested right of suit without providing any equivalent remedy, then according to the approved rule of construction, the provisions must be considered to have been enacted subject to the implied exception that they were not to extend to such vested rights of suit which were to continue subject to the rules of limitation in force at the passing of the Act.

Kumaraswami Sastri, J. - It is well known rule of construction that retrospective operation ought not to be given to a Statute as to take away vested rights rules that effect cannot be avoided without doing violence to the language of the enactment, and that except in special cases the new law ought to be construed so as to interfere as little as possible with vested rights.

The correct rule seems to me to be that though laws affecting limitation might abridge or enlarge periods of limitation in cases of suits or causes of action which were alive at the dat when the new enactment came into force and which under the old law would expire afterwards, the change cannot, unless there is clearly expressed intention to the contrary, either by apt words in the enactment or otherwise, be retrospective so as to destroy rights of suits which were alive on the date." The above observation of Wallis, C.J. was agreed to by Justice Kumaraswami as is clear from the above observations made by the learned Judge. The learned Senior Counsel also invited our attention to the observations of G.P. Singh in the book Principles of Statutory Interpretation, 7^th edition, at pages 380 and 381 where the learned author has observed as follows:- Statutes of limitation are regarded as procedural and the law of limitation which applies to a suit is the law in force at the date of the institution of the suit irrespective of the date of accrual of the cause of action. The object of a statute of limitation is not to create any right but to prescribe periods within which legal proceedings may be instituted for enforcement of rights which exist under the substantive law. But, after expiry of the period of limitation, the right of suit comes to an end, therefore, if a particular right of action had become barred under an earlier Limitation Act, the right is not revived by a later Limitation Act even if it provides a larger period of limitation than that provided by the earlier Act. On the sample principle, if right to execute a decree or judgment gets barred under an earlier Act, the right is not revived by a later Act. When the later Act provides a shorter period of limitation than that provided by the earlier Act, a right of suit, which is subsisting according to the earlier Act on the date when the later Act comes into operation, will not be taken to be extinguished. If there is still time even on the basis of the later Act within which such a suit can be filed, the right has to be availed of within that period, and the benefit of the earlier Act is not available. Condonation of delay in such cases is filing the suit or claim will be governed by the provisions of the later Act and not by the provisions of the earlier Act. But if the shorter period provided in the later Act had already expired on the date of its enforcement, the suit can be filed within a reasonable time after the commencement of the later Act, otherwise the effect of the later Act would be to extinguish a subsisting right of suit, an inference which cannot be reached except from express enactment or necessary implication. To avoid these complications when a later Limitation Act enacts shorter period, it is usual to postpone is coming into effect for some reasonable time, or to make provision for a time gap within which the benefit of the earlier Act can be taken. Statutes of Limitation are thus retrospective in so far as they apply to an illegal proceedings brought after their operation for enforcing causes of action accrued earlier, but they are prospective in the sense that they neither have the effect of reviving a right of action which is already barred on the date of their coming into operation, nor do they have the effect of extinguishing a right of action subsisting on that date. But a statute may, expressly or impliedly by retrospectively extending limitation, revive a barred claim." 8. The sum and substance of the learned Senior Counsel's argument is that the instant application for rectification is filed only for clarifying the position of the inclusion of the technical know how in the valuation of the goods for purpose of calculation and payment of duty.

9. As against this, learned departmental representative only emphasises the fact that the present application has been filed only after the order passed by the adjudicating authority on remand. If the appellant is aggrieved, he should file an appeal to the Commissioner (Appeals), not rectification of mistake application directly to the Tribunal.

10. At the outset, it has to be stated that in the instant case, the appeals of the assessee as well as the department against the order of the Commissioner (Appeals) made on 13.7.1994 was passed by us, as stated earlier, on 9.4.2001. At that time, the provisions of Section 35C(2) of the Central Excise Act made it very clear that any person who intends to file an application for rectification of any mistake apparent from the records, viz.the order passed by the Tribunal can be filed within four years from the date of such order. In the instant case, the application has been filed on 7.1.2003. In between when the remand order of the Commissioner (Appeals) dated 13.7.1994 was taking into effect, a letter was written by the lower authority on 12.12.2002 which is reproduced below:- ""Kindly refer to your letter F. No. WDU/dated 11-12-2002 received in this office on 12-12-2002 on the above subject. In this connection, this is to inform you that all the submissions/cost reports/any other information relating to determination of cost, supplied by you so far (alongwith the Hon'ble CEGAT's decision dated 28-04-2001) has been put before the Asst. Director (Costs) Central Excise for his opinion as to whether the information supplied by you is sufficient to decide the matter in terms of Hon'ble CEGAT's Order.

The Asstt. Director (Costs) Central Excise opined that the matter cannot be verified for sole reason that the following information is required to be supplied by you. It was observed that- (1) As per CEGAT's Order dated 28-04-2001, vide Para 8 the cost of technical know-how provided by M/s Cadbury was to be included in the cost of manufacture. However, the cost sheets and supporting documents submitted by you do not reflect the inclusion of technical know-how charges. Thus, details of such technical know-how charges have to be provided by you. Please do the needful.

(2) The cost sheets and supporting working sheets so submitted by you mention that R.M. & P.M. has been taken from cost sheet certified by Mr. Medhekar dated 21-03-1995. This cannot be considered as source document for finalisation of value.

Accordingly, you are requested to please prepared and submit the cost sheet on the basis of base documents like Ledger A/c, Purchase Register, Invoices etc. Such source documents are also required to be provided by you for test verification purpose.

(3) The inward transport charges appears to be not included in the cost. Details of such charges may please be supplied.

(4) Cost of insurance for raw materials etc. was to be borne by M/s Cadbury. However, in this worksheet this expenditure is not shown separately. This aspect may be examined by you and amount of such expenditure not included may please be furnished by you.

(5) The source documents/records in support of conversion charges may also kindly be provided.

I have thoroughly gone through your letter No. WDU/dated 11-12-2002 and find that you are under wrong impression that the information is being called for delaying the matter. Please note that the Department is interested n finalising the matter and in abiding by the orders of Hon'ble CEGAT. However, this can be finalised with your co-operation only because the information called for under this office letter dated 10-12-2002 and as pointed out by Asstt. Director (Costs) Central Excise has to be submitted by you immediately.

Though in your above letter you have stated that all information submitted, it is not a fact. However, you may point out specifically stating under which letter the above information is submitted, if at all submitted.

You are once again requested to kindly submit the information called for in order to finalise the issue before stipulated time, preferably within two days from the date of receipt of this letter.

Your esteemed co-operation will be highly appreciated.

The adjudicating authority on remand has understood the Tribunal's order in one way or the other way. Whether that is correct or not, I cannot pass order at this juncture, but an application under Section 35C(2) filed by the applicant has to be looked into.

11. The preliminary objection taken by the departmental representative is that the application is barred by limitation. The amendment made to the Central Excise Act has been introduced by form of Finance Bill which culminated in passing of Finance Act some time in May, 2002. If a person who is aggrieved with the order passed by the Tribunal, could he have filed an application for rectification of mistake which is apparent on the face of the record. Let us assume that in this case, can the applicant file the application within six months of the order? In our view, he could not have filed it. Our order has been made in April, 2001. If we reckon six months from that date, it ends with 5^th October, 2001 when the amended Act was never in force. Can we make this type of interpretation of the Finance Act, 2002 so as to deprive those appellants whose appeals have been disposed of by the Tribunal in 2001? In our view, such an interpretation would not be warranted in the fats of the case. As stated earlier, nobody could have with a reasonable foresight thought that in respect of time limit within which an application for rectification of mistake should be filed within six months of the order. This is a right given to all the appellants. In fact in the earlier of the order, we have referred to the right of an appellant who is aggrieved by an order passed by the Tribunal, namely filing of a reference application in the High Court or an appeal to the Supreme Court under certain circumstances. Some persons may even file a writ application under Article 226 of the Constitution. These are all the rights inhered to a litigant in terms of the specific provisions of the Central Excise Act and the Constitution of India. A litigant who initiates a litigation in the form of an appeal to the Tribunal has certain rights which cannot be taken away unless by legislation stating to that in a clear terms.

12. The temptation which one person may jump to the conclusion that limitation is a procedural one has been succinctly explained by the learned author, G.P. Singh, in the Principles of Statutory Interpretation where the leaned author has specifically stated that when the later Act provides a shorter period of limitation than that provided by the earlier Act, a right of suit which is subsisting according to the earlier Act on the date Act will not be taken to be extinguished. He refers to the judgment of the Supreme Court in the case of New India Assurance Co. Ltd. v. Smt. Shanti Misra 1975 (2) SCC 840, which is extracted below:- "Whether accidents had occurred prior to the constitution of the claims tribunal and no suit had been filed in the civil court, the vested right of action was not meant to be extinguished.

The change in law was merely a change of forum i.e. a change of adjectival or procedural law and not of substantive law. Such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a valid right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away. Otherwise the general rule is to make a retrospective. The expression "arising out of an accident: occurring in Sub-section (1) and "over the area in which the accident occurred", mentioned in Sub-section (2) in Section 110A show that the change of forum was meant to be operative retrospectively irrespective of the fact as to when the accident occurred.

Primarily the law engrafted in Section 110A and 110F is a law relating to change of forum and it is not reasonable and proper to allow the law of change of forum to give way to the bar of limitation provided in Sub-section (3) of Section 110A. It must be vice versa. The change of the procedural law of forum must be given effect to.

Taking recourse to the proviso appended to Sub-section (3) of Section 110A for excusing the delay made in the filing of the application between the date of the accident and the date of the constitution of the tribunal is not correct, Section 5 of the Limitation Act, 1963 or the proviso to Sub-section (3) of Section 110A of the Act are meant to condone the default of the party on the ground of sufficient cause. But if a party is not able to the file an application for no fault of his but because the tribunal was not in existence, it will not be a case where it can be said that the "applicant was prevented by sufficient cause from making the application in time" within the meaning of the proviso. The time taken between the date of the accident and the constitution of the Tribunal cannot be condoned under the proviso.

However the application is not barred by Sub-section (3) of Section 110A for the following reasons: (1) Time for the purpose of filing the application under Section 110A did not start running before the constitution of the tribunal Time had started running for the filing of the suit but before it had expired the forum was changed. And for the purpose of the changed forum, time could not be deemed to have started running before a remedy of going to the new forum is made available.

(2) Even though by and large the law of limitation has been held to be a procedural law, there are exceptions to this principle.

Generally the law of limitation which is in vogue on the date of the commencement of the action governs it. But there are certain exceptions to this principle. The new law of limitation providing a longer period cannot revive a dead remedy. Nor can it suddenly extinguish vested right of action by providing for a shorter period of limitation.

Amendment of the law of limitation could not destroy the plaintiff's right of action which was in existence when the Act came into force.

Giving retrospective effect to the change of law in relation to the forum, in the context of the object of the change, is imperative.

That being so the principles aforesaid for overcoming the bar of limitation will be applicable.

The jurisdiction of the civil court is ousted as soon as the claims tribunal is constituted and the filing of the application before the tribunal is the only remedy available to the claimant.

So that an application can be filed within a reasonable time of the constitution of the tribunal, which ordinarily and generally, would be the time of limitation mentioned in Sub-section (3). If the application could not be made within that time from the date of the constitution of the tribunal, in a given case, the further, time taken in the making of the application may be held t be reasonable time on the facts of that case for the making of the application or the delay made after the expiry of the period of limitation provided in Sub-section (3) from the date of the constitution of the tribunal can be condoned under the proviso to that sub-section.

On facts, the remedy available to the respondents was to go before the claims tribunal and since the law was not very clear on the point, the time of about four months taken in approaching the tribunal after its constitution can be held to be either a reasonable time or the delay of less than 2 months could well be condoned under the proviso to Sub-section (3) of Section 110A." One may be tempted to state that in this case, it is not a suit but an application for rectification of mistake. The instant application and the suit may be poles apart but can we show a blind eye to the situation here. What will happen to those litigants who have instituted appeals before the Tribunal and whose appeals have been disposed of in April, 2001 Can we hold that they do not have the right of filing the rectification of mistake application. In our view, the preliminary objection raised by the learned department representative has to be rejected, firstly because the judgment of the Bombay High Court in Universal Drinks Pvt. Ltd. (supra) clearly clinches the issues in paragraphs 10, 11 & 12 which we have referred to in earlier portion of this order. Moreover, even if one has to state that the suit which is referred to in the case of New India Assurance may be different from the application for rectification, but yet the principle which is applicable to suit will hold good here. If their right of filing the rectification of mistake apparent on the record is extinguished for these types of litigants, the others whose case have been disposed of subsequently, they will have right to keep their rights intact, namely the right to file their application for rectification of mistake, whereas the appellant whose appeal has been disposed of in April, 2001 would be denied. That could not be the intention of the Parliament unless the Parliament by the necessary enactment says so specifically.

We are not competent to say anything about as to whether the Parliament could negate the right of the appellant on the touchstone of Article 14 of the Constitution because that power only High Court could exercise under Article 226 of the Constitution, or the Supreme Court exercise that power under Article 32 of the Constitution. But we are deciding the case as a member of the Tribunal which is a creature of statute and I do not have the same powers. Following the principle which the Bombay High Court has held in the above case of Universal Drinks as well as the decision of the Madras High Court referred to above in the case of Rajah of Pittapur. The Supreme Court in the case cited above has also said a right of appeal is not a mere matter of procedure but a substantive right carrying with it that all rights of appeal then in force or were preserved to the parties thereto till the rest of the career of the suit and it is considered as a vested right.

13. This takes us to the judgment of the Supreme Court in the case of Osram Surya (P) Ltd. v. CCE 2002 (50) RLT 129 referred to by the departmental representative during the argument, where in paragraph 7, the Supreme Court has held as follows:- "7. Having heard the arguments of the parties and after considering the Rule in question, we think that by introducing the limitation in the said proviso to the Rule, the statute has not taken away any of the vested rights which had accrued to the manufacturers under the Scheme of Modvat. That vested right continues to be in existence and what is restricted is the time within which the manufacturer has to enforce that right. The appellants, however, contended that imposition of a limitation is as goods as taking away the vested right. In support of their arguments they have placed reliance on a judgment of this Court in Eicher Motors Ltd. v. Union of India [1999 (106) E.L.T. 3 (S.C.)] wherein this Court had held that a right accrued to an assessee on the date when it paid the tax on the raw-materials or the inputs would continue until the facility available thereto gets worked out or until those goods existed. In that background, this Court held that by Section 37 of the Act, the authorities concerned cannot make a rule which could take away the said right on goods manufactured prior to the date specified in the concerned Rule. In the facts of Eicher's case (supra), it is seen that by introduction of Rule 57F (4A) to the Rules, a credit which way lying unutilized on 16-3-1995 with the manufacturer was held to have lapsed. Therefore, that was a case wherein by introduction of the Rule a credit which was in the account of the manufacturer was held not to be available on the coming into force of that Rule, by that the right to credit itself was taken away, whereas in the instant case by the introduction of the second proviso to Rule 57G, the credit in the account of a manufacturer was not taken away but only the manner and the time within which the said credit was to be taken or utilized alone was stipulated. It is to be noted at this juncture that the substantive right has not been taken away by the introduction of the proviso to the Rule in question but a procedural restriction was introduction which, in our opinion, is permissible in law. Therefore, in our opinion, the law laid down by this Court in Eicher's case (supra) does not apply to the facts of these cases.

This is also the position with regard to the judgment of this Court in Collector of Central Excise, Pune and Ors. v. Dai Ichi Karkaria Ltd. and Ors.

14. Reading the above paragraph, one may be tempted to state that the imposition of limitation is restriction in the matter of enforcement of the right. As stated earlier, in April 2001, the appellant could not have foreseen what is to be happened in 2002. The judgment of the Supreme Court in the above case, in the peculiar circumstances of this case, will not be applicable. We would therefore hold, on the facts and circumstances of this case, that the instant application is not barred by limitation.

15. This takes us to the other question, viz. whether the instant application is to be accepted on merits. The reason why the instant Application has been made is reflected in paragraph 15 and 16 of the Application reproduced in paragraph 3 of the order. In paragraph 16 of the Application, it has been stated that there may be an ambiguity in the last two sentences occurring in paragraph 8 of our Order dated 9.4.2001 which we reproduce below:- "8. We will now proceeded to consider the elements of value that are included by the Collector which are challenged by Warana. The first of these is the cost of technical know-how provided by Cadbury to Warana and what is described as cost of goodwill. By technical know-how is meant the information that governs the process of manufacture exactly what proposition of what ingredients is to be used, and at what stage in manufacture, and the exact processes to which these are to be subjected. The cost of technical know-how therefore would generally form part of the cost of manufacture. Such cost would however not includible in the cost relating to technical know-how would hence not form part of the assessable value." In the instant case, the applicant worked as a job worker after having an understanding with the company called Cadbury India Ltd. thereby the applicant had to manufacture Bournvita using the two materials and packing materials supplied by the said Cadbury India Ltd. as per the recipe and specification given by the said Cadbury India Ltd. The relationship between the job worker and the person who gives the raw material is reflected in paragraph 30 of the judgment of the Supreme Court in the case of Ujagar Prints v. UOI 1988 (38) ELT 535 at page 544, which is reproduced below.

"30. In the case of processing-houses, they become liable to pay excise duty not because they are the owners of the goods but because they cause the 'manufacture' of the goods. The dimensions of the Section 4(1)(a) and (b) are fully explored in a number of decisions of this Court. Reference may be made to the case of Bombay Tyres International.

Consistent with the provisions of Section 4 and the Central Excise (Valuation) Rules, 1975, framed under Section 37 of the Act, it cannot be said that the assessable value of the processed fabric should comprise only of the processing-charges. This extreme contention if accepted, would lead to and create more problems than it is supposed to solve; and produce situations which could only be characterised as anomalous. The incidence of the levy should be uniform, uniformed by fortuitous considerations. The method of determination of the assessable value suggested by the processors would lead as to the untenable position that while in one class of Grey-fabric processed by the same processor on bailment, the assessable-value would have to be determined differently dependent upon the consideration that the processing-house had carried out the processing operation on job-work basis, in the other class of cases, as it not unoften happens, the goods would have to be valued differently only for the reason the same processing-house has itself purchased the Grey-fabric and carried out the processing operations on its own." The owners of the raw material, viz. Cadbury India Ltd. no doubt gives the same to the appellants. There cannot be any tax on transfer or the ownership of the raw material. The duty is imposed or levied on only the activity of manufacture. The judgment of the Supreme Court in the case of Empire Industries Ltd. and Ors. v. UOI and Ors. 1985 (20) ELT 179. At paragraph 48 of this judgment, it has been stated that "The fact that the petitioners are not the owners of the end product is irrelevant. Taxable event is manufacture - not ownership." This view has been upheld by the constitution bench of the Supreme Court in the above said case of Ujagar Prints at page 554 at paragraph 31 where the Supreme Court held that on consideration of the matter, the view taken in the Empire Industries case did not call for reconsideration. In the subsequent paragraph it was specifically held that the Union of India and its authorities shall be entitled to recover the amounts due by way of arrears of excise duty. But here the question is about the items includable for purpose of valuation of the end product. Here the technical know how is regarding manner of producing the end product. It is like a recipe. It is never transferred from Cadbury India Ltd. The end product is manufactured. All these statements are only reiteration of what is already in existence before us. The two sentences mentioned in paragraph 8 of our order may lead to certain confusion. That is why we are rectifying or correcting the error which has been manifestly crept in the judgment. We are not arriving at such a decision in a circuitous way. Nor are we arriving at the decision in a review or appeal by disguise. The same thing is reflected in the order only for purpose of elucidation. The technical know is never transferred because in all the job work, there is no transfer of any raw material from the raw material supplies to the job worker. This has been explained by the judgments of the Supreme Court in the above two cases. We are therefore of the view that the applicant has made out the case and the rectification application stands allowed. The last two sentences of paragraph 8 of our order would stand deleted.

16. This takes us to one other important point which the learned departmental representative has touched. He states that the Order-in-Original on remand has been passed on 30.12.2002. Therefore the party if he is aggrieved ought to have filed an appeal to the proper forum and cannot forgleap as an appeal to the Tribunal. This is an interesting argument made by the learned departmental representative. At a first blush, the argument appears to be logical, but when we look into the real issue, it will be noted that the Order-in-Original dated 30.12.2002 has been passed on the our Order dated 28.4.2001. By the instant order, we have corrected or rectified the mistake in the said Order dated 28.4.2001. Therefore the basis on which the Order-in-Original has been passed by the adjudicating authority has been rectified. Therefore the argument of the learned departmental representative cannot be accepted.

17. For this purpose, it will be useful to refer to the decision of the three-member bench of the Tribunal in the case of CCE, Madras v. Ashok Leyland Limited 1987 (29) ELT 530 where under more or less similar circumstances in dealing with a refund, the Tribunal held that these types of arguments of the department has been rejected. Paragraphs 4, 8(1) and 8(4) of the said decision have been quoted for easy appreciation.

"4. The Assistant Collector held in his order-in-original dated 29-11-1975 that main dealers as well as sub-dealers of the respondents were related persons. He ordered assessment to be made on the basis of the retail sales price charged by the sub-dealers.

In appeal, the Appellate Collector, agreed that the main dealers were related persons but directed the Assistant Collector to re-examine whether sub-dealers could be treated as non-related persons. In remand, the Assistant Collector passed another order on 12-4-1977 in which he accept the uniform discount of Rs. 1500/- given by main dealers to sub-dealers but disallowed the over-riding commission given by the respondents to their main dealers in the case of supplies made by the respondents directly to Government Department etc. Not satisfied with the Appellate Collector's order, the respondents filed a revision application to the Central Government. The Central Government confirmed that main dealers were related persons but accepted the price charged by the main dealers to sub-dealers. All the clearances were consequently assessed uniformly on the price charged by the main dealers to sub-dealers, irrespective of the category of sales. The respondents persisted in their point that their main dealers were not related persons and took the matter to the High Court of Madras by way of writ petition and sought the writ of certiorari. A learned Single Judge of the Madras High Court allowed the writ in favour of the respondents on 28-9-1981. The department filed an appeal before the Division Bench of the High Court, which was dismissed on 7-12-1982 [1983 E.L.T. 2168 (Madras)]. The Union of India filed a Special Leave Petition before the Supreme Court, which was also dismissed on 25-11-1983.

8(1) The learned representative of the judgment stressed time and again that the respondents had not filed an appeal against the Assistant Collector's order dated 12-4-1977 passed in remand proceedings and the said order, therefore, became final. We do not agree. Once the order-in-appeal, which directed remand to the Assistant Collector, itself was appealed against, first before the Central Government and then before the High Court, in was not necessary for the respondents to file a separate appeal against the order dated 12-4-1977 of the Assistant Collector passed in remand.

In any case, now that the respondents have conceded the department's point relating to sales to Government Bodies and Departments etc., there is practically no substance left in this point of the department.

8(4) Finally, the learned representative of the department contended that retail sales and removals for captive use were not the subject matter of original adjudication by the Assistant Collector and hence the assessments made in these cases had become final and it was not open to the respondents to bring them up at the time of claiming consequential refund. We do not agree. Once the normal price under Section 4(1)(a) had been finally determined at the level of the Supreme Court, assessments of all categories to which such normal price should apply would have to be re-opened. We have already stated that removals for captive use and for retial sales had to be assessed at the normal price available at the time and place of removal under Section 4(1)(a)."