ORDER
G.R. Sharma
1. Arguing the application for rectification of mistake, Shri A.P.Mathur, ld. Advocate submits that following mistakes have crept in, in the order of the Tribunal:-
“3. That the Hon’ble Tribunal while passing the final order dated 15.9.2000 has neither recorded the actual arguments of the counsel nor dealt with the same. Even while dealing with some of the contentions the same have been produced in the manner in which the same were never pleaded, and vital contentions raised have not been reproduced and considered.
4. That the Hon’ble Tribunal did not record the contention of the applicant’s counsel that the demand of Rs.53,55,862/- was raised on the basis of GRs which pertained to the period 14.10.93 to 14.6.95 and the demand of Rs.33,22,722/- raised on the basis of Menthol produced and cleared without payment of duty during June, July, 1995 was merged in the demand of Rs.53,55,862/- by the adjudicating authority. The merging of Rs.33,22,722/- in Rs.53,55,862/- is evident of the fact that the department has no case because by no stretch of imagination the demands raised for the period June, July, 1995 cannot be merged in the demand of Rs.53,55,862/- as the GRs pertain to the period only 14.10.93 to 14.6..95, meaning by that at least goods produced and cleared after 14th June, 95 to July, 95 could not have been cleared under the cover of seized GRs and if the allegation in respect of demands raised for the period after 14th June, 95 to July, 95 is not correct in that event there is no authenticity of the correctness of the department’s allegation in respect of the rest demand in the absence of investigations being not made from the consignors and consignees depicted on the GRs.
5. That the Hon’ble Tribunal did not take into account the contention of the applicants’ counsel that the demand of Rs.33,22,722/- was raised on the basis of assumptions alleging that it appears that in processing Mentha oil by freezing 60-70 kgs of Menthol is obtained and 30-40 kgs of DMO is generated as by product. Therefore a factory generating 30-40 kgs of DMO is to receive 60-70 kgs of Menthol, and while calculating the quantity of Menthol obtained, not only took the quantity of DMO in stock but also took the quantities of essential oils in stock and failed to take into account that some of the essential oils in stock could not have been obtained out of Mentha oil. The applicants’ counsel also challenged the calculation of obtaining Menthol and DMO out of Mentha oil. He specifically argued that nay stretch of imagination 100% final product cannot be obtained out of the raw material.
6. That the Hon’ble Tribunal inspite of noticing the plea of the counsel challenging the verification of the stock, did not give any finding on the same.
7. That the Hon’ble Tribunal has also not correctly appreciated the contention of the applicants’ counsel in respect of the demands being time barred. The applicants’ counsel had argued that the genuineness of the seized GRs could only be verified by making enquiries from the consignors and consignees given on the GRs and requested the Hon’ble Tribunal to get the same verified, and also invited to the kind attention of the Hon’ble Tribunal on the affidavits given by the consignors and consignees corroborating the submissions of the applicants’ which were on record; but the Hon’ble Tribunal has failed to record a finding on the same. The Counsel had urged that if the GRs are found to be correct in that event the allegations of suppression of facts and mis-statement of facts cannot be sustained and consequently extended period of limitation cannot be invoked. The applicants’ counsel had urged that since the RT-12 returns were finalised upto May 95 at the time of visit of the Officers, hence there was repeated notice to the department that fractional distillation plant was not operative and distilled products were not being manufactured hence under no circumstances extended period of limitation could have been invoked. Moreover it is settled law that RT-12 returns are finalised the extended period of limitation cannot be invoked.
8. That the Hon’ble Tribunal also did not consider the plea of the applicants’ counsel inviting the attention of the Hon’ble Tribunal to the fact that the consignors had received payments by drafts from the consignees in respect of the goods transported on the basis of GRs and the said drafts were deposited in the accounts of consignors much prior to the visit of the Central Excise Officers i.e.12.7.95. The extract of the accounts of the consignors and consignees of the banks were on record.
9. That the Hon’ble Tribunal had based its findings contrary to record. The fraction distillation plant was admittedly detected found operating in the premises of one of the trading unit and the deep freezers and centrifugaals were found in the working hall of the applicants’ factory which were duly approved by the department. The Hon’ble Tribunal took an adverse view against the applicants under misconception that fraction distillation plant was found operating in one corner of the working hall and the freezers and centrifugals found operating were not approved by the department. The applicants owned the freezers and centrifugal and had stated that the same were installed in the working hall as per approved ground plan. The distillation plant found operating in the trading unit was being run by the trading unit on trial basis and did not belong to the applicants. The Hon’ble Tribunal did not take into account the receipt produced by the trading unit for its purchase and did not take into account that the Commissioner ought to have discharged the same without making enquiries from the seller of the distillation plant.
10. That the Hon’ble Tribunal was also wrong in observing that the production was going on regular basis and nt on trial basis. The applicants’ counsel had clarified from the records that the production of DMO and Menthol is admittedly seasonal i.e. from July to December and the production of DMO and Menthol had started from a dat earlier from the Officers’s visit to the factory and no distilled products were being manufactured in the factory since December, 93 as the distillation plat had developed fault and had been sent for repairs and the fact that distilled products are not being manufactured were duly reflected in the RT-12, returns, which stand duly finalised by the department, and even after 12.7.95 inspite of alleging manufacture of distilled products by the applicants RT-12 returns were approved by the department showing nil production of the same. The Hon’ble Tribunal failed to give any finding on the same.
11. That the Hon’ble Tribunal was wrong in observing that there was nobody from trading units at the time of the visit of the Central Excise Officers to claim the fraction distillation plant and the seized goods. The finding is contrary to the records as Sri Ajay Kumar Saxena has been made a witness to the panchnama drawn on 12.7.95 who was an employee of the Trading Unit i.e. M/s. Quality Flavours Exports. A true copy of the panchnama is annexed to this application marked as Annexure A-1.
12. That the applicants’ counsel also argued that admittedly as per allegations the distillation plant installed in the trading unit was found operating in full swing; hence it is unbelievable that the same was being operated without assistance of labourers and other staff. The officers ought to have recorded the statement of the labourers in order to substantiate the allegation that the distilled products were being manufactured by the applicants and none-else. The Hon’ble Tribunal has failed to give any finding on this score.
13. That most of the observations observed by the Hon’ble Tribunal are contrary to records and submissions of the applicants’ counsel; That most of the submissions recorded in the impugned order are not correct reproduction of the submissions as made by the applicants’ counsel.
14. That the Tribunal failed to give finding on the submission of the petitioners’ counsel that no penalty could have been imposed on dummy units, and no adverse inference can be drawn against the applicants without making investigations from the party to whom the distillation plant had been sent for repairs.
15. That the Hon’ble Tribunal was factually incorrect in observing that some of the GRs resumed indicated that the trading units purchased goods from M/s. D.D.Shah Fragrances (P) Ltd., Bombay, Besta Laboratories Vapi Bombay, Indian Flavours and Fragrances Pvt. Ltd., Bombay. The GRs resumed did not relate to the purchase of the goods by the trading units from the Bombay based firms. The applicants had specifically stated that it has been wrongly alleged that what goods they had sold to these Bombay based firms were purchased by the trading units. The same can be verified from the invoices itself and the allegations of the department cannot be substantiated in the absence of enquiries not being made form Bombay based firms. The counsel specifically argued the same in detail that the Hon’ble Tribunal for reasons best known to it did not record the same and did not give any finding on the same.
16. That the Hon’ble Tribunal did not give any on the plea of the applicants that the entire case has been made out on the basis of surmises and presumptions without making proper investigations and affording reasonable opportunity to the applicants to put up their case. The principles of natural justice were sacrificed.
17. That the Hon’ble Tribunal failed to give specific findings in all the points raised and argued inspite of Hon’ble High Court’s specific orders.”
2. Shri M.M.Dubey, ld. DR submits that the order is specific on all points raised and that the points mentioned in the ROM are really not mistakes apparent but are a request for review of the order. He submits that under Section 35C (2), the Tribunal has been given powers to recitify any mistake apparent form the records. He submits no such mistake apparent from the records has been pointed out and, therefore prays that the application may be rejected.
3. We have carefully considered the submissions made by both sides, the detailed arguments of the counsel and the impugned order also.
4. In the ROM application it has been stated that most of the arguments of the counsel were not recorded and considered; that the demand of Rs.53,55,862 was raised on the basis of GRs which pertained to the period 14.10.93 to 14.6.95 and the demand of Rs.33,22,722 was raised on the basis of menthol produced and cleared without payment of duty during June, July, 1995 was merged in the demand of Rs.53,55,862 by the adjudicating authority; that merging of demand of Rs.33,22,722 in Rs.53,55,862 is evident from the fact that the department has no case because by no stretch of imagination the demands raised for the period June, July, 1995 can be merged in the demand of Rs.53,55,862 as the GRs pertain to the period only 14.10.93 to 14.6.95, meaning thereby that at least goods produced and cleared after 14.6.95 to July, 1995 could not have been cleared under the cover of seized GRs which are for the period upto 14.6.95 and if the allegation in respect of demand raised for the period after 14.6.95 to July, 1995 is not correct in that event there is no authenticity of the correctness of the department’s allegation in respect of the rest of the demand and that the Tribunal did not take into account the contention of the applicant’s counsel also that on the basis of assumptions alleging that it appears that in processing 100 kgs Mentha oil by freezing 60 to 70 kgs of Menthol is obtained and 40 to 30 kgs of DMO is generated as by-product and that applicant’s counsel also challenged the calculation of obtaining Menthol and DMO out of Mentha oil.
5. We have carefully considered the contentions that verifications of stocks at the time of visit was not correctly done, that ratio of 60 to 70 kgs of menthol and 40 to 30 kgs of DMO and other by products has no scientific basis; inclusion of production of goods and computing duty on these goods in the demand of Rs.53,55,862 is incorrect as the production is supposed to be during the period 14.6.95 onwards when no goods receipts were found. The contention of the applicant is incorrect as will be evident from para 18 and 19 of the SCN inasmuch as the demand of Rs.33,22,722 pertained to 40,521 kgs of Menthol which was calculated to have been produced on the basis of recovery of Menthol form Peperment oil, Mentha oil and the balance generated as DMO by-product. We further note that the Commissioner in the order in original in para II on page 18 tabulated that the total demand was Rs.86,78,584 and out of that Rs,33,22,722 was supposed to be the demand for the period June, July, 1995 based on the deemed production of menthol. He, however, held that since the demand of Rs.53,55,862 was based on GRs and, therefore clearance, if any, during the material period was covered by the figures computed on the basis of GRs. He, therefore held that the amount of Rs.33,22,722 is not separately demandable and if there was any production or clearance that would be covered by the demand of Rs.53,55,862 worked out on the basis of total clearance effected from the factory under the GRs and thus there is no mistake that the goods cleared after 14.6.93 could not be taken as covered by the demand of Rs.53,55,862. We, thus, find that since the demand of Rs.33,22,722 has been dropped which was based on demand production, deemed ratio and hence objection of incorrect verification of stock non-scientific basis of ratio and inclusion of goods produced after 14.6.95 did no longer existed.
6. Ld. Counsel also submitted that M/s. Quality Chemicals and M/s. Quality Flavours have been held as dummy unit. However, on going through the impugned order, we do not find this observation. The finding of the Tribunal was that the goods were manufactured by M/s. Quality Exports and removed without payment of duty and were being sold to different parties in the name of M/s. Quality Chemicals and M/s. Quality Flavours.
7. Ld. Counsel also submitted that the Tribunal had wrong impression that the limitation issue was not raised before the authorities below. We find that the Tribunal had considered the limitation issue in detail and concluded that there was no mis-statement and suppression of facts.
8. Ld. Counsel also agitated the question of levy of penalty on Shri Mukul Gupta Mrs. Vandana Gupta Mrs. Veena Gupta and Shri Alok Tiwari. We find that the penalties had been imposed under Rule 209A of the Central Excise Rules. Rule 209A stipulates that any person who acquires possession or in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner deals with the excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these Rules shall be liable to penalty not exceeding three times or Rs.5000/- whichever is greater. We find that this Rule is wide enough. The role of these persons was clearly brought out by the adjudicating authorities and, therefore, the penalty has rightly been imposed and therefore there is no mistake.
9. On careful consideration of the submissions made and the order passed by the Tribunal, we find that the decision has been validly made by this Tribunal and is not open on the alleged ground that accoring to the applicant the decision was erroneous on facts or law.
10. Powers of rectification of mistake under Section 35C (2) is a limited power and this power is restricted to rectification of mistake apparent from the records calling for amendment of the order. Rectification means taking out a mistake. A mistake apparent on records must be obvious and patent mistake and not something which can be established by long drawn process of reasoning of points of which there may conceiveably be two opinions.
11. If it is a debatable point of law or facts is not a mistake apparent from the records and the debatable issue could not be the subject matter of an order of rectification. Rectification of mistake does not envisage the rectification of an alleged error of judgement.
12. Rectification of mistake is by o means an appeal in disguise whereby an order even valid is reheared and redecided. Rectification of mistake allows only for patent mistake. Only in a case where the mistake stares one in the face and therefore there could reasonably be no two opinions entertained about it.
13. On careful consideration of the matter, we hold that a decision which has been validly made is not open for review on the alleged ground that according to the applicant the decision was erroneous on facts or law. In any case, the Tribunal has no powers to review its order.
14. This Tribunal is a creation of statute. Only the powers conferred under the statute which created it can be exercised. It has no inherent power as are available with the courts established under the Constitution or court of civil procedure or criminal procedure. This Tribunal can under no circumstance recall an order passed or issued under cover of rectification of mistake. This Tribunal cannot exercise any power to recall the order validly passed.
15. In view of the above discussion on points raised in the ROM application, we find that the application is nothing but a request for review of the Tribunal order and since the Tribunal does not have the power ti review its own orders, therefore, ROM application is rejected.