MUMBAI, APRIL 23, 2013: AGAINST an order dated 08/03/2011 passed by the CESTAT, the Revenue has filed a ROM application on 12/09/2011.

A preliminary objection has been raised by the respondent that the application is time barred inasmuch as since the order was passed on 08/03/2011, the ROM application ought to have been filed by 07/09/2011 whereas it has been filed only on 12/09/2011.

The Bench noted that as per the provisions of Section 35C(2) of the CEA, 1944, the Appellate Tribunal may at any time within six months from the date of the order with a view to rectify any mistake apparent from the records, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to his notice of the Commissioner of Central Excise or other party to the appeal. It was further observed that it is a settled position in law that ‘the date of the order' means the date of communication of the order and in the case on hand the communication has been completed only on 20/06/2011; that from the records, it is seen that the order itself has been dispatched only on 13/06/2011 by the registry and, therefore, it has to be held that the application filed on 12/09/2011 has been filed in time.

On the mistake pointed out by the Revenue, the Bench observed that the Tribunal had in its order held that molasses is not an input for the manufacture of sugar and, therefore, duty paid on molasses, cannot form the part of the credit for payment of duty on sugar. Having held that the duty paid on molasses cannot be taken as credit for payment of duty on sugar, the Tribunal had then dismissed the appeal filed by the Revenue.

In as much as the appeal had been filed by the revenue on the ground that the respondent had wrongly utilised the credit of duty paid on molasses amounting to Rs.77,59,089/- for payment of duty on sugar manufactured and cleared by them, the Bench observed that there is an apparent mistake on the records of the case which needs to be corrected.

The respondent assessee referred to rule 3(3) of CCR, 2004 and submitted that there is no nexus required to be established between the input on which credit is taken and the output on which duty has been paid.

It is, therefore, their contention that the respondent is rightly eligible for the credit.

The Bench observed -

“9. From the reading of Rule 2(f) and Rule 3 (1) it is clear that input is something which is required in or in relation to the manufacture of final products. If a product is an input then the specific duty paid thereon can be taken as credit for payment of duty on the final product. It is in this context that this Tribunal observed that the molasses cannot be considered as input for manufacture of sugar. There being no dispute on this aspect, the duty paid on molasses cannot form part of the credit for the purpose of payment of duty on sugar. There being no dispute on this aspect, the duty paid on molasses cannot form part of the credit for the purpose of payment of duty on sugar. In other words the findings of the Tribunal was that the duty paid on molasses cannot form part of credit for payment of duty on sugar. However, instead of allowing the appeal, the Tribunal committed an error by dismissing the appeal. Therefore, there is merit in the ROM application filed by Revenue. Accordingly, we direct that the sentence “On factual aspect in this regard there being no dispute applying the law to the said facts, no interference is called for in the impugned order. Hence, the appeal fails and is hereby dismissed”, the following sentence shall be substituted, namely, “On factual aspect in this regard, there being no dispute applying the law to the said facts, the appeal succeeds and is allowed. Accordingly, the matter is remanded back to the original adjudicating authority for re-determination of the demand in accordance with the law”.

The ROM application was disposed of accordingly.

In passing: Is it the end of the story?

(See 2013-TIOL-641-CESTAT-MUM)