By TIOL News Service

NEW DELHI, JAN 07, 2013:

Murphy's law

If anything can go wrong, it will.
Corollary: It can.
Corollary: It should.
Corollary: At the most inopportune time.
Extension: It will be all your fault and everyone will know it.

This is precisely what happened in the instant case and the blame goes to the stenographer . But this case also has another surprise element, thanks to the Revenue representative.

An order was passed by the CESTAT but the dictation which was given in another case got copied as order in this particular appeal, which got signed by both the Members and was issued.

Anyways, the fact of the matter is that the appeal was allowed with consequential relief to the appellants.

So, the appellant doesn't mind even if anything else appears in the order – he, obviously, is and should be concerned about the last paragraph of the order.

But the Revenue is not at all happy. The Commissioner, Central Excise, Jaipur filed a ROM application reproducing the order passed and mentioning the following –

“ii) The above facts do not pertain to issue involved in the appeal No. ST/1459/2011-Cu(DB) filed against the Order in Appeal No. 287 (DKV) ST/JPR-I/2011 dated 30.6.2011 (correctly mentioned in the impugned order).

(iii) The facts appears to be of any other appeal. As the issue involved in this appeal is non-payment of Service Tax amounting to Rs.167394/- on the amount received by M/s. Paramount Communication Ltd. Khushkhera (Alwar) from M/s. Paramount Wires and Cables Ltd., Bhiwadi on account of sharing of office staff which fall under the category of "Manpower Recruitment or Supply Agency Service".

(iv) In view of above the Final Order No. ST/A/463/2012-Cus(DB) & Stay Order No. SO/ST/S/670/2012 dated 5.6.12 passed by the Hon'ble CESTAT appears to carry mistake as pointed out above and requires correction.

PRAYER

It is therefore, prayed that the mistake apparent may kindly be rectified and the Final Order No.ST/A/463/2012-CU(DB) and Stay order No. SO/ST/S/670/2012 dated 5.6.12 may be modified accordingly.”

The Revenue representative who was supposed to argue for the Revenue seemed not inclined to do so – at least what he argued did not indicate it!

He was at his boisterous best. He submitted that it is not a mistake apparent on record and the facts as carried out in the order and the decisions relied upon do not relate to appeal in question and, therefore, now if the ROM application has to be considered, the entire matter has to be reconsidered and such reconsideration of matter cannot be allowed in a ROM application and therefore, the Revenue's prayer should be rejected . He also had in his arsenal seven decisions of the Supreme Court to be used as cannon balls.

Anyone would be aghast with this idiosyncrasy and the Bench commented about it in as many words -

“4. We are really surprised by the prayer of AR for rejecting the application filed by the Revenue . So we have considered the matter on our own and we find that there is a mistake which is apparent on record inasmuch as it would appear that dictation which was given in another case has got copied as order in this particular appeal, which got signed by both the Members and was issued. We also note that as per the note sheet in file the dictation was given in the open court allowing the stay petition as also appeal on 5.6.2012.

5. Learned AR insists that in terms of various decisions of Hon'ble Supreme Court, the rectification can be done only where error is apparent and the entire order cannot be replaced with a new order.

6. We are aware of all the judgements cited by the learned AR and the ratio laid down is that no review can be sought for, in the garb of application for rectification of mistake. The question required to be decided in the present application is as to whether the entire order which got mistakenly issued can be held to be an error or the same can be considered to be a review.”

Saying so, the Bench observed -

“7. In the entire scenario, we note that admittedly, a wrong order got issued (as the mistake happened in the hands of Steno) without noticing the facts of the present case, the replacement of said order cannot be considered to be a review of the same. The entire order, which got issued was a mistake inasmuch as the same does not relate to the facts of the present case except that the reference of Appeal No. and impugned order in appeal match in the preamble to those in case under consideration making it look as if the present order relates to the appeal of M/s. Paramount Communication. As such, it has to be concluded that the entire order is a mistake, requiring rectification of same. The point made out by learned AR that such rectification can be done only to small clerical mistake in the order, cannot be appreciated inasmuch as in the present case the entire order is a clerical mistake. The mistakes required to be rectified does not depend upon the length of said mistake or does not relate to one or two words in the order. When the entire order which got issued was not relatable to the matter under dispute, notwithstanding the reference numbers in the preamble of the same, it has to be held as if the entire order was a mistake. In fact such provisions for correction of such mistakes in the Act is for rectifying mistakes on pointing out by either side or by the Tribunal itself. If the same comes to the notice of the Tribunal as such even if the present ROM application was not filed by the Revenue, the Tribunal was empowered to rectify the mistake on its own, on coming to know of the same. Similarly, such rectification application can be filed by the assessee also inasmuch as the Final Order does not relate to facts of their case. So, the insistence of the learned AR that such ROM application filed by the Revenue should be rejected at the threshold cannot be appreciated and prayer to that effect cannot be accepted.

8. At the stage of dictating order on 5.6.2012, no objection regarding the facts or the arguments dictated was raised by either side. Therefore, our inference is that order was dictated correctly. Though the transcription which got signed relate to a different matter. Therefore, it is very obviously a mistake apparent on record and needs correction at any rate and therefore, we decided to dictate the appropriate order afresh.

9. We had asked the learned AR whether he has got any submissions on merits to make. He has submitted that he does not want to make any submissions in the matter regarding merits because it will contradict his stand that re-appreciation of the merits of the case cannot be done while dealing with an application for Rectification of Mistake . We accordingly hold that the order dictated separately would be held as the correct order passed in the appeal of M/s. Paramount Communication Wire and Cables Ltd. being Appeal No. Service Tax/1459/2011. Earlier order dt. 5.6.2012 is withdrawn ROM is allowed.”

Consequently, the Bench took up the “actual” issue involved in the appeal and held thus –

“The facts of the case are that the appellant, M/s. Paramount Communications Wire and Cable Ltd., and another sister concern company M/s. Paramount Wire and Cable Ltd. were utilising the services of certain common staff located in their common head office at Delhi, Such staff was on the pay roll of Paramount Communication Ltd. They were doing the work relating to both the companies and Paramount Cables Ltd. was paying their share of the cost of these employees to the appellant. There are entries in the books of accounts of the appellant showing receipt of payments from Paramount Wires and Cables. Revenue wants to tax this receipt as consideration for supply of manpower.

2. The definition of man-power supply services as Section 65(68) is as under:-

'Manpower recruitment or supply agency' means any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of man power, temporarily or otherwise, to a client"

3. The present appellant is a manufacturer of excisable goods and is not engaged in the business of supply of manpower, though they were sharing the services of some of the office personnel with their sister concern. Here there is no case of supply of manpower by the appellant to the sister company because the employees concerned continued to work for the appellant also and arrangement in which certain employees work for two of sister concerns and the expenses of employees are shared, the manpower is not supplied by one company to other. The situation is that the personnel do the work of both the companies. The service is by the personnel to the two companies in question and not one company providing service to the other company. So there is no taxable activity on the part of the appellant to the other to be taxed under manpower supply service taxable as 65(105)(k) and therefore, the stay petition as well as appeals are allowed. The fact that payment to employee is made by one company and there is inter-company payment of the share of the cost of the employees utilised by the other company cannot be interpreted to mean one company was providing service to the other....”

In fine, the order-in-appeal was set aside and the appeal was allowed.

AGT in passing: Advice is seldom welcome, and those who want it the most always like it the least – Earl of Chesterfield, Jan. 29, 1748.

Also see Volant Textile Mills Ltd. 2005-TIOL-1019-CESTAT-MUM.

(See 2013-TIOL-37-CESTAT-DEL)