Whether the review of the order under the garb of rectification of mistake application is permissible?

PJ/Case Law/2019-2020/3611

AIREF ENGINEERS PVT. LTD. Versus COMMISSIONER OF SERVICE TAX, DELHI 2020 (34) G.S.T.L. 433 (Tri. - Del.)

Brief Facts- The appellant has filed rectification of mistake application in respect of Tribunal’s Final Order No. 58111-58112/2017, dated 29-11-2017 indicating to certain mistakes in the said order praying for rectifying the same.

Issue- Whether the review of the order under the garb of rectification of mistake application is permissible?

Assessee Contentions- The applicant submits that while the Tribunal in the said order has remanded the matter but in respect of application of rate of tax leviable on the works contract, the Tribunal has not agreed with the appellant. Moreover, during the period when the appellant opted for payment of duty under composite scheme on works contract, the rate of tax was 2% which was subsequently enhanced to 4% in March, 2008. It is the contention that in terms of the Hon’ble Calcutta High Court’s decision in the case of Larsen & Toubro v. Assistant Commissioner of Service Tax - 2017 (7) G.S.T.L. 41 (Cal.) the increase in rate of tax from 2% to 4% with effect from 1-3-2008 would not be applicable to the ongoing work contracts in respect of which the appellant has already exercised his option to pay duty under the composite scheme. However, he fairly agrees with the said decision of the Calcutta High Court was not placed before the Bench and submits that failure on the part of the assessee to bring it to the notice of the Bench, a particular decision, is a sufficient cause for rectification of mistake.

Reasoning of Judgment- The Tribunal found that the issue of applicability of rate of duty in respect of ongoing works contracts were considered by the Bench and has come to a clear finding that the ongoing works contract would attract the higher rate of duty with effect from 1-3-2008.
The appellant’s contention now that Calcutta High Court decision was not taken into consideration, even though the same was not placed before the Bench, cannot be appreciated. The reliance on the Larger Bench decision of the Tribunal in the case of Hindustan Lever Ltd. v. CCE, Mumbai - 2006 (202) E.L.T. 177 (Tri. - LB) laying down that non-consideration of a decision on the issue would be an error apparent from the records requiring rectification is not applicable to the facts of the present case in as much as the Calcutta High Court decision.
The Tribunal in the case of Balaji Action Buildwell v. CCE vide its Misc. Order No. 50281/2018, dated 15-5-2018 has referred to the Hon’ble Supreme Court’s decisions and has observed that it is not necessary to discuss each and every argument of the appellant and in the name of ROM review of appeal is not permissible. For better appreciation they reproduce Paras 8 and 9 of the said decision :
“8. It may be mentioned that it is not necessary to discuss each and every argument of the appellant. Only the cumulative effect will have to be mentioned in the order as per the ratio laid down in the case of CIT v. Karam C. Thappar - 176 ITR 535 SC.
9. In the name of ROM review of the appeal is not permissible as per the ratio laid down in the following cases :-
(i)     Prajatantra Prachar Samity v. CIT - 264 ITR 160 Orissa;
(ii)    CIT v. Mcdowell & Co. Ltd. - 269 ITR 451 Karnataka;
(iii)   M/s. Bhagat Construction Store v. CIT, 197 Taxation 263 Guwahati; and
(iv)   CIT v. Malwa Texturising (P) Ltd. - 292 ITR 488 (MP).
Apart from above, they also take note of the Hon’ble Supreme Court’s decision in the case of Deva Metal Powders Pvt. Ltd. v. Commissioner of Trade Tax, U.P. - 2008 (221) E.L.T. 16 (S.C.). The Hon’ble Supreme Court has held that power to rectify mistake does not cover cases where a revision or review of the order is intended. A mistake which can be rectified is the one which is patent and is obvious and whose discovery is not dependent on argument or elaboration. Rectification of an order does not mean obliteration of order originally passed and its substitution by a new order. Where an error is far from self evident and is not confined to clerical or arithmetical mistake, it ceases to be an error apparent on records. What the appellant is seeking in the present case, is the reversal of the conclusion already arrived at by the Tribunal, which can be changed only by long drawn process of argument by both the sides. As such, it cannot be said that the error pointed out by the Learned Advocate is an error apparent on the face of the records.
We also further note that the appellant had not placed the said order of Calcutta High Court, before the original Bench on which they are referring to now, and whose applicability to the facts of the present case is required to be examined by arguments to be advanced by both the sides. In such a scenario, we observe that it was not a mistake on the part of the Bench but it was a mistake on the part of the litigant, for which there is no scope of any rectification provided under the Act.
Decision- ROM application is rejected.
Prepared By- CA Preksha Jain

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PJ/Case Law/2019-2020/3611

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