Case: Commissioner of Cental Excise, Belapur, Mumbai Vs. RDC Concrete (India) P. Ltd

earlier order dated 4th November, 2008 and order dated 23rd November, 2009 passed in pursuance of the rectification application, we are of the view that the CESTAT exceeded its powers given to it under the provisions of Section 35C(2) of the Act. This Court has already laid down law in the case of T.S. Balram v. M/s.Volkart Brothers, 82 ITR 50 to the effect that a “mistake apparent from the record” cannot be something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. It has been also held that a decision on a debatable point of law cannot be a mistake apparent from the record. If one looks at the subsequent order passed by the CESTAT in pursuance of the rectification application, it is very clear that the CESTAT re-appreciated the evidence and came to a different conclusion than the earlier one. At an earlier point of time, the CESTAT came to a conclusion that the company to which the respondent-assessee sold its goods was an inter- connected company. In the circumstances, according to the CESTAT, the decision of the department to appoint a Cost Accountant to ascertain value of the goods manufactured by the asessee was considered to be just and proper. However, after considering the submissions made in pursuance of the rectification application, the CESTAT came to a different conclusion to the effect that the asessee company and the buyer of the goods were not inter-connected companies. Different conclusions were arrived at by the CESTAT because it reappreciated the evidence in relation to common directors among the companies and inter se holding of shares by the companies. Re-appreciation of evidence on a debatable point cannot be said to be rectification of mistake apparent on record. 17. Similarly, in pursuance of the rectifying application, the CESTAT came to the conclusion that an officer of the department, who was working as Assistant Director (Cost) and who was also a Member of an Institute of Cost and Works Accountants was not competent as a Cost Accountant to ascertain value of the goods. It is strange as to why the CESTAT came to the conclusion that it was necessary that the person appointed as a Cost Accountant should be in practice. We do not see any reason as to how the CESTAT came to the conclusion that the Cost Accountant, whose services were availed by the department should not have been engaged because he was an employee of the department and he was not in practice. The aforestated facts clearly show that the CESTAT took a different view in pursuance of the rectification application. The submissions which were made before the CESTAT by the respondent-assessee while arguing the rectification application were also advanced before the CESTAT when the appeal was heard at an earlier stage. The arguments not accepted at an earlier point of time were accepted by the CESTAT after hearing the rectification application. It is strange as to how a particular decision taken by the CESTAT after considering all the relevant facts and submissions made on behalf of the parties was changed by the CESTAT. There was no mistake apparent on record when the CESTAT did not accept a submission of the respondent-assessee to the effect that the officer appointed to value the goods manufactured by asessee should not have been engaged as a cost accountant. 18. We are not impressed by the judgments cited by the learned counsel for the respondent. So far as the judgment delivered in the matter of Saci Allied Products Ltd. v. Commissioner of C. Ex., Meerut, 2005(183) E.L.T 225 (S.C.) is concerned, it pertains to sale of goods by an asessee to an independent and unrelated dealers and its effect on valuation. The said judgment pertains to a transaction with a related person in the State of U.P., at lower price and as such deals with the facts of that particular case. In our opinion, the said judgment would not help the respondent so far as the matter pertaining to rectification is concerned. 19. So far as the judgment delivered in Commissioner of Central Excise, Mumbai v. Bharat Bijlee Limited, (supra) is concerned, this Court held therein that when the Tribunal had totally failed to take into consideration something which was on record, the Tribunal had committed a mistake apparent on the face of the record. In the instant case, the evidence which was on record was duly appreciated by the Tribunal at the first instance but the Tribunal made an effort to re-appreciate the evidence and re-appreciation can never be considered as rectification of a mistake. We are, therefore, of the view that the aforementioned judgment would not help the respondent-assessee.20. So far as judgment delivered in the case of Honda Siel Power Products Ltd. v. Commissioner of Income Tax, Delhi, 2008(221) E.L.T 11 (S.C.), is concerned, there also the Tribunal had not considered certain material which was very much on record and thereby it committed a mistake which was subsequently rectified by considering and appreciating the evidence which had not been considered earlier. As stated hereinabove, in the instant case, the position is absolutely different. 21. This Court has decided in several cases that a mistake apparent on record must be an obvious and patent mistake and the mistake should not be such which can be established by a long drawn process of reasoning. In the case of T.S. Balram v. M/s. Volkart Brothers (supra), this Court has already decided that power to rectify a mistake should be exercised when the mistake is a patent one and should be quite obvious. As stated hereinabove, the mistake cannot be such which can be ascertained by a long drawn process of reasoning. Similarly, this Court has decided in ITO v. Ashok Textiles, 41 ITR 732 that while rectifying a mistake, an erroneous view of law or a debatable point cannot be decided. Moreover, incorrect application of law can also not be corrected.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]17. Similarly, in pursuance of the rectifying application, the CESTAT came to the conclusion that an officer of the department, who was working as Assistant Director (Cost) and who was also a Member of an Institute of Cost and Works Accountants was not competent as a Cost Accountant to ascertain value of the goods. It is strange as to why the CESTAT came to the conclusion that it was necessary that the person appointed as a Cost Accountant should be in practice. We do not see any reason as to how the CESTAT came to the conclusion that the Cost Accountant, whose services were availed by the department should not have been engaged because he was an employee of the department and he was not in practice. The aforestated facts clearly show that the CESTAT took a different view in pursuance of the rectification application. The submissions which were made before the CESTAT by the respondent-assessee while arguing the rectification application were also advanced before the CESTAT when the appeal was heard at an earlier stage. The arguments not accepted at an earlier point of time were accepted by the CESTAT after hearing the rectification application. It is strange as to how a particular decision taken by the CESTAT after considering all the relevant facts and submissions made on behalf of the parties was changed by the CESTAT. There was no mistake apparent on record when the CESTAT did not accept a submission of the respondent-assessee to the effect that the officer appointed to value the goods manufactured by asessee should not have been engaged as a cost accountant.So far as the judgment delivered in Commissioner of Central Excise, Mumbai v. Bharat Bijlee Limited, (supra) is concerned, this Court held therein that when the Tribunal had totally failed to take into consideration something which was on record, the Tribunal had committed a mistake apparent on the face of the record. In the instant case, the evidence which was on record was duly appreciated by the Tribunal at the first instance but the Tribunal made an effort to re-appreciate the evidence and re-appreciation can never be considered as rectification of a mistake. We are, therefore, of the view that the aforementioned judgment would not help the respondent-assessee.20. So far as judgment delivered in the case of Honda Siel Power Products Ltd. v. Commissioner of Income Tax, Delhi, 2008(221) E.L.T 11 (S.C.), is concerned, there also the Tribunal had not considered certain material which was very much on record and thereby it committed a mistake which was subsequently rectified by considering and appreciating the evidence which had not been considered earlier. As stated hereinabove, in the instant case, the position is absolutely different.