ORDER
D.C. Mandal, Member (T)
1. In the Misc. Order No. M-32/89-D, dated 9-3-1989 this Tribunal has recorded that when this appeal came up for hearing for the first time on 30-8-1988, Shri Santhanam, General Manager (Legal) of M/s. L.M.L. Limited said that the matter was covered by the Tribunal’s Order No. 160-161/88-D, dated 17-2-1988 and he handed over a copy of the said order. Shri L.C. Chakraborty, learned DR wanted time to study further. The matter was, therefore, adjourned to the next date. When the matter came up again for hearing on 1-9-1988, Shri Chakraborty submitted that the matter was fully covered in favour of the appellants vide the order of the Tribunal cited by Shri Santhanam. Accordingly, the operative part of the order, which was to follow was orally pronounced by the Bench in the open court allowing the appeal. However, at the time of dictating the judgment, it appeared that prima facie the issue in the present appeal was different from the issue which was decided in the order of this Tribunal relied upon by Shri Santhanam and cited before the Bench as covering the present case. Briefly, in the case relating to present appeal, the Department’s allegation is that the appellants were recovering caprolactum from nylon waste by the process of de-polymerisation and not by the process of recycling, which would entitle them to the benefit of Notification No. 18/84-C.E., dated 1-3-1984 and the Notification No. 36/85-C.E., dated 17-3-1985, as amended. According to these notifications, caprolactum produced out of nylon polymer waste by the process of recycling was chargeable to nil rate of duty. The appellants’ contention in this matter was that the process of de-polymerisation and the process of recycling were one and the same. But this view was not accepted by the Department. Another allegation of the Department is that there was suppression of facts as the appellants did not declare in the classification list that they would recover caprolactum out of nylon waste by the process of de-polymerisation. Accordingly, a show cause notice was issued on 14-1-1987 demanding duty for the period from December, 1984 to October, 1985 beyond the normal period of limitation. In the Order No. 160-161/88-D, dated 17-2-1988, this Tribunal held that the waste arising after emergence of filament and before the same was wound on the cops was also a waste arising during the course of manufacture of nylon yarn and so far as the criterion of waste prescribed in the relevant Notifications No. 18/84-C.E. and 36/85-C.E. was concerned, it was satisfied. Therefore, while the present matter as well as the matter decided in Order No. 160-161/88-D, dated 17-2-1988 relate to interpretation of Notifications No. 18/84-C.E. and No. 36/85-C.E., it appeared to us that the issues are quite different and prima facie it is not correct to say that the Tribunal’s Order No. 160-161/88-D covers the issue before us in the present matter.
2. In the light of the foregoing, it appeared to us that an error crept in having lost sight of the material difference between the issue involved in the present appeal and that in Tribunal’s Order No. 160-161/88-D, dated 17-2-1988 at the time of orally pronouncing the operative part of the judgment on 1-9-1988. Accordingly, before exercising our powers under Sub-section (2) of Section 35C of the Central Excises and Salt Act to rectify any mistake in our order, we felt it expedient, in the interest of justice, to issue notice to both the parties to show cause as to why the operative part of the judgment (which was to follow) pronounced orally on 1-9-1988 be not recalled for rectification and why the matter should not be heard on merits. We ordered accordingly and informed the parties by our Misc. Order No. M-32/89-D, dated 9-3-1989.
3. The matter came up for hearing on 20-3-1989 in pursuance of the aforesaid order, when we heard Shri R. Santhanam for the appellants and Shri L.C. Chakraborty for the respondent. Shri Santhanam drew our attention to his written submissions dated 14-3-1989. Referring to paragraph-3 of the said written submissions we pointed out to him that the last sentence of that paragraph was not correct as this Tribunal did not take any view on the point whether de-polymerisation was different from recycling for the purpose of exemption Notifications No. 18/84-C.E. and 36/85-C.E., as amended, as no arguments were advanced by either side to this appeal before this Tribunal on 30-8-1988 and 1-9-1988.
4. Shri Santhanam then argued that under Section 35C(2) of the Central Excises & Salt Act, 1944, this Tribunal could rectify a mistake which was apparent from the record and such mistake should be so patent or obvious that it did not require long drawn process of investigation or arguments. According to him, there was no such error apparent on record in the decision pronounced by the Tribunal on 1-9-1988 as, according to him, the processes of de-polymerisation and recycling were one and the same thing and there was no difference between the two. In support of this argument, he drew our attention to the Circular No. 12/88-CX. 3 issued by the Central Board of Excise and Customs, New Delhi from File No. 107/1/88-CX. 3, which was published at page 1-105 of the CBEC Digest for December, 1988, Vol. II (published by the Directorate of Publications, Customs and Central Excise, New Delhi). He argued that the operative part of the judgment of the Tribunal having been pronounced orally, the Tribunal could not re-hear the matter in view of the Supreme Court Judgment reported in AIR – 1988-SC-371 in the case of Vinod Kumar Singh v. Banaras Hindu University and Ors.
5. Arguing for the respondent, Shri Chakraborty admitted that the ratio of the earlier decision of the Tribunal vide Order No. 160-161/88-D, dated 17-2-1988 did not cover the issue in the present case. The manner of recycling was not gone into in the said order. In the present case, the issues were different and the merits would have to be examined by the Tribunal and that earlier on 1-9-1988 he committed error in stating that the matter was fully covered in favour of the appellants. According to him, there was an error in the operative portion of the decision pronounced on 1-9-1988 inasmuch as the issues in the two cases were different and could not be said that issue in the present case was covered by the said order dated 17-2-1988. He argued that the Tribunal could rectify its order in view of the Tribunal’s earlier decision reported in 1984 (15) E.L.T. 482 (Tri.) in the case of Smt. Prativa Rani Samanta v. Collector of Central Excise, Calcutta. In the said decision, the Tribunal followed the judgments of Hon’ble Supreme Court, Calcutta High Court and Allahabad High Court in addition to certain other decisions. Shri Chakraborty relied on all the judgments discussed in the Tribunal’s decision reported in 1984 (15) E.L.T. 482 (Tribunal) supra.
6. We have carefully considered the records of the case and the arguments advanced by Shri Santhanam and Shri Chakraborty on the question of recalling our order orally pronounced on 1-9-1988 and re-hearing the matter on merits. As already stated in our Misc. Order No. M-32/89-D, dated 9-3-1989, the issues dealt with in the impugned Order-in-Original No. 34/Collr./MP/87 dated 17-12-1987 are whether de-polymerisation and recycling are different from each other and whether there was suppression of facts warranting application of longer time-limit beyond the period of six months for demanding Central Excise duty. In the case covered by this Tribunal’s Order No. 160-161/88-D, dated 17-2-1988, the issue decided by this Tribunal was whether the waste arising after emergence of filament and before the same was wound on the cops was also a waste arising during the course of manufacture of nylon yarn for the purpose of exemption Notifications No. 18/84-C.E., dated 1-3-1984 and No. 36/85-C.E., dated 17-3-1985, as amended. There is not even a whisper about the de-polymerisation in the Tribunal’s Order No. 160-161/88-D. The issue decided by the Tribunal vide Order No. 160-161/88-D dated 17-2-1988 is, therefore, completely different from the issue for consideration involved in the present case before us. It was, therefore, a mistake on the part of Shri Santhanam and Shri Chakraborty to state before this Bench on 30-8-1988 and 1-9-1988 respectively that the present case was fully covered by the earlier decision dated 17-2-1988 (supra) and it was also an inadvertent error on the part of this Tribunal to accept the statement of both the parties and take a view on that basis. Thus, an error apparent from the record crept in while orally pronouncing operative part of the decision on 1-9-1988.
7. Section 35C(2) of the Central Excises and Salt Act, 1944, provides as follows :-
“(2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Collector of Central Excise or the other paty to the appeal.”
Sub-section (1) of Section 35C of the Act ibid reads as follows :-
“(1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.”
The wording of Sub-section (2) of Section 35C of the Central Excises and Salt Act is similar to the provisions of Section 254 (2) of the Income-Tax Act, 1961 which reads as follows :-
“The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Sub-section (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the Income-tax Officer;”
According to the provision of Section 35C(2) of the Central Excises and Salt Act, this Tribunal can rectify any mistake in its order apparent from the record. Shri Chakraborty has relied on this Tribunal’s decision reported in 1984 (15) E.L.T. 482 (Tribunal) in support of his argument that the Tribunal is competent to rectify a mistake apparent on record under Section 35C(2) of the Act. In the said decision, the Tribunal held that it could recall its order and rehear the matter on merits. In the said decision, the Tribunal considered the following judgments :-
(i) (1960) 38 ITR 1 in the case of Mangat Ram Kuthiala v. Commissioner of Income-tax.
(ii) (1965) 58 ITR 626 (Allahabad H.C.) in the case of S.B. Singar Singh and Sons v. Income-tax Appellate Tribunal.
(iii) (1965) 58 ITR 634 (Allahabad H.C.) in the case of Income-tax Officer v. Income-tax Appellate Tribunal.
(iv) (1969) 73 ITR 283 (Bombay H.C.) in the case of Blue Star Engg. Company (Bom.) Pvt. Ltd. v. Commissioner of Income-tax.
(v) (1973) 92 ITR 189 (Calcutta H.C.) in the case of Murlidhar Surda v. Income-tax Appellate Tribunal.
(vi) (1974) 93 ITR 186 (Calcutta) in the case of Shew Paper Exchange v. Commissioner of Income-tax.
(vii) (1974) 96 ITR 97 (Allahabad) in the case of Gargi Din Jwala Prasad.
(viii) AIR 1980 SC 477 in the case of Chagan Raju v. State of Andhra Pradesh; and
(ix) AIR 1973 Gauhati 8 in the case of Ganpatrai Dhanuka v. A.K. Ban-dyopadhyay.
In the case of Mangat Ram Kuthiala v. Commissioner of Income-tax (supra) it was observed by their Lordships that a Judicial Tribunal can recall and quash its own order in exceptional and rare cases when it is shown that it was obtained by fraud or any palpable mistake or was made in utter ignorance of a statutory provision and the like. It was also observed therein that the Tribunal has inherent power to recall such an order, quash it, and make an order on merits and according to law in the ends of justice. The provision in Section 35C(2) of the Central Excises & Salt Act, 1944 is similar to the provisions of Section 254(2) of the Income-tax Act, 1961. The ratio of these judgments under the Income-tax Act are applicable to the present case. The mistake in the present case is apparent on the face of the record and it goes to the root of the order. The error having come to the notice of the Tribunal, it must rectify the same by recalling the order and rehear the matter on merits. An omission to rectify this mistake will cause serious prejudice to the interest of justice.
8. Shri Santhanam has relied on the judgment of Supreme Court reported in AIR 1988 SC 371 in support of his argument that the Tribunal could not recall its order and rehear the appeal on merits in this case. In the said case, judgment was pronounced in the open court and the Writ Petition was allowed by the Hon’ble High Court. However, the judgment was not signed. The concerned Bench of the High Court released the case and issued direction that the case be listed for further hearing. The said matter having come before the Supreme Court, the Hon’ble Supreme Court held that in the absence of exceptional circumstances, the judgment delivered orally in the open court must be taken to be final. The aforesaid judgment of the Hon’ble Supreme Court is clearly distinguishable from the facts of the present case inasmuch as in the case before the Hon’ble Supreme Court, there was no material at all to show as to what led the Division Bench of High Court, which had pronounced the judgment in the open court not to authenticate the same by signing it, as observed in paragraph-9 of the judgment of the Hon’ble Supreme Court (supra). In the present case, the circumstances are exceptional. The Tribunal’s earlier decision vide Order No. 160-161/88-D, dated 17-2-1988 decided a completely different issue than what was discussed and decided by the Collector in the case before us. Instead of that, both sides to the appeal represented that the present case was fully covered by the said earlier decision. A copy of the said order dated 17-2-1988 was filed by Shri Santhanam in the open court before this Bench on 30-8-1988. Therefore, the record did not warrant to take a view that the said order dated 17-2-1988 fully covered the present case. There is, therefore, exceptional circumstances and an error apparent on record crept in when the operative part of the order was orally pronounced on 1-9-1988. The ratio of the judgment relied on by Shri Santhanam is not, therefore, applicable to the facts of the present case.
9. In view of the foregoing discussions, we recall the operative portion of our order, which was orally pronounced on 1-9-1988 and direct the Registry to list this appeal for hearing on merits as early as possible.