V.K. Agrawal, Member (T)
1. This is an application by M/s. DSM Anti-Infectives India (Pvt.) Ltd. for rectification of mistake in Tribunal’s Final Order No. 697-698/2003-NB(C) dated 19.11.2003.
2. Shri V. Swaminathan, learned Consultant, submitted that the issue decided by the Final Order in question was whether the re-processing operations undertaken by the Applicants on the duty paid bulk drugs, received under Rule 173-H of the Central Excise Rules, 1944 amounts to deemed manufacture in terms of Note 11 to Chapter 20 of the Schedule to the Central Excise Tariff Act; that the Tribunal has upheld both the Orders-in-Original dated 15.11.2002 and 4.3.2003 on merits by holding that the re-processing operations undertaken by them amounts to deemed manufacture in terms of the third ingredient in Note 11 to Chapter 29 of the Tariff; that the Tribunal has also held in Para 9 of the Final Order in question that the extended period of limitation for demanding duty it invocable as they had not disclosed the actual process to be undertaken by them on the bulk drugs returned to them at the time of filing D-3 declaration; that the Tribunal has observed as under;
It is not disputed by the appellants that they had mentioned only “Testing” in the declaration filed by them. The pica of Revenue neutrality also does help the appellants as the Revenue has also alleged value addition in the re-processed goods which has also not been rebutted by the appellants.
3.1He contended that the said observation of the Tribunal is a mistake apparent on record inasmuch as they, in their declaration filed with the Department, had not at all mentioned that the subject goods were received for the purpose of “Testing”; that on the contrary, they had clearly mentioned in these declarations that the “Rejected materials received for reprocessing under Rule 173-H”; that the Department had also not alleged anywhere, either in the show cause notice or in the impugned Order, that they had mentioned only “Testing” in D-3 declarations; that in the absence of any such alleged mis-declaration in D-3 declarations and also in absence of such allegation either in the show cause notice or in the impugned Order, the observation of the Tribunal is a “mistake apparent on record” and needs to be rectified.
3.2 He, further, mentioned that the second mistake relates to the effect that the Revenue has not at all alleged any “value addition” of the reprocessed goods, either in the show cause notice dated 12.3.2001 or in the Order-in-Original dated 15.11.2002 and as such the question of their rebuttal by them does not arise at all.
4. Opposing the prayer, Shri Kumar Santosh, learned Senior Departmental Representative, submitted that the synopsis submitted by the learned Consultant at the time of hearing clearly mentions that “the Commissioner has held that the 3r ingredient to the above Chapter Note namely, “or the adoption of any other treatment to render the product marketable to the consumer” would be attracted to the facts of the case for the following reasons (a) ., (b) value addition to the reprocessed goods, (c) ….”, that thus it cannot be claimed by the applicants that there is a mistake apparent on the face of the record for considering the aspect of “value addition” by the Tribunal. He, further, submitted that the extended period of limitation is invocable as the Applicants had not disclosed the exact processes to be undertaken by them on the duty paid goods received back by them; that thus there was suppression of the actual processes carried out by them.
5. We have considered the submissions of both the sides. As far as the aspect of value addition is concerned, there is no mistake apparent on the face of the record inasmuch as the applicants had themselves mentioned the same in the synopsis submitted by their learned Consultant. Regarding the other mistake pointed out by the learned Consultant, we observe that it was a specific submission made by the learned Senior Departmental Representative at the time of hearing of the Appeal on 28.8.2003 that the appellants had mis-declared to the Department that the goods were received back for “Testing” only whereas their customer’s letter dated 26.12.2000 makes it clear that the goods were not in good condition and cannot be used and were sent back for replacement. It is also mentioned in the Final Order that “In reply the learned Consultant mentioned that at the time of filing D-3 declaration, they cannot envisage the nature of processing required to rectify the defect; that this can be done only after the goods are received into the factory and inspected by the quality control department after a considerable time.” It is thus observed that at the time of hearing the learned Consultant had not controverted the contention of the learned Senior Departmental Representative that they had declared that the goods were received back only for “testing”. However, the D-3 declaration clearly mentions in Remark Column as “Rejected material received for reprocessing under Rule 173-H”. Thus, the record speaks otherwise and as such to this extent there is a mistake apparent from the record. Accordingly the mistake apparent from the record is rectified by ordering that the extended period of limitation is not invocable. To this extent the Tribunal’s Final Order No. 697-698/2003-NB(C) dated 19.11.2003 is modified.