REPORTABLE                 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6704  OF 2008 (Arising out of S.L.P. (C) No.10532/2008)

  Sunitadevi Singhania Hospital ...Appellant            Trust and Anr.

Versus

  Union of India & Anr.         ...Respondents                    

   O  R  D  E  R

Leave granted.

Appellants  are  before  us  being  aggrieved by and dis-satisfied

with  an  order  dated  18.1.2008  passed  by  a  Division  Bench  of  the  High  Court  of

judicature at Bombay dismissing the writ petition filed by the appellants herein on the

ground that it was not a fit case  to exercise the Court's extraordinary jurisdiction.

The basic fact of the matter is not in dispute.

Appellant No.1 which is a Charitable Tust runs a hospital on no

profit  basis.  It  imported  certain   equipments  invoking  the  Notification  64/88-Cus.

dated 1.3.1988 issued by the Government of India in terms whereof  exemption from

payment of custom duty was granted in respect thereof subject to an obligation that it

would reserve 10% of the beds for patients from families having a income of less than

Rs.500/- per month and provision for free treatment of at least 40% of the outdoor

patients shall be made.

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An investigation was carried out in the year 1999 as to whether

the appellant No.1 had fulfilled all such conditions or not. The matter went before the

Customs  Excise  and  Service  Tax  Appellate  Tribunal,  West  Regional  Bench  at

Mumbai. The appeal of the appellant before the Tribunal was heard along with the

cases of M/s Miraj Medical Centre W. Hospital and M/s Balabhai Nanavati Hospital.

By  reason  of  a  judgment  and  order  dated  19.1.2006,  the

Tribunal having held that the appellants before it had continuous obligation to fulfill

the aforementioned conditions laid down under the said Notification dated 1.3.1988

and having not complied therewith the redemption fine and penalty imposed upon it

by the Customs Authorities were justified.

Indisputably, appellant filed an application for rectification of

mistake before the Tribunal in regard to the quantum of redemption fine and penalty.

The said application was allowed.

An  appeal  was  preferred  against  the  order  of  the  Tribunal

before this Court.  

It is stated before us by Shri S.Ganesh, learned senior counsel

appearing on behalf of the appellants and we have no reason to disbelieve him that

one of the contentions raised before this Court was that the Tribunal  had not taken

into consideration the fact involved in the matter  and had the same been done it could

have been

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established that the appellant had in fact fulfilled all its obligations in terms of the

said Notification. Several other points were also said to have been urged before the

Tribunal.

This Court, presumably, on the premise that Judges' record is

final and if an apparent error has been committed by the Tribunal in not taking into

consideration  the  contentions  raised  before  it  by  the  appellants,  permitted   it  to

withdraw  the  appeal  with  liberty  to  file  an  appropriate  application  before  the

Tribunal, stating:

"  Learned  counsel  states  that  several  other  points  had  been argued before the Tribunal which have not been taken note of by it. Learned counsel states that an appropriate application shall  be filed before the Tribunal  and seeks permission  of  the  Court  to  withdraw  the  appeal.  The  appeal  is  dismissed  as withdrawn accordingly."

Pursuant thereto or in furtherance thereof the appellant No.1

filed  an  application  before  the  Tribunal  purported  to  be  an  application  for

rectification of mistake wherein, inter alia, the following grounds were raised:

" 8. While disposing of the appeals by a common order dated 19.1.2006, this Hon'ble Tribunal has only recorded the facts as applicable to one of the appellants, namely, the Miraj Medical Centre and has failed to appreciate the difference in facts and circumstances in the applicants case, inter-alia, as regards the following:

(a) The applicants had actually reserved 10% of the hospital beds for poor and  indigent  persons  and  had  advertised  on  several  occasions  the  facility  of  free treatment to such people without means;

(b) The applicants also satisfied the criteria for out patient treatment, both by giving free treatment at the hospital's OPD as also by organizing free treatment camps, and the free treatment camps have been judicially recognised as meeting the purpose of the notification, by the Hon'ble Madras High Court in Apollo Hospital's case, which was relied upon by the applicants in their memorandum of appeal;

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(c) The equipment and records were completely destroyed in the riots of 2001, which were beyond the applicants' control;

(d) In any event, the applicants being a hospital run by a charitable trust, on a no profit basis, the applicants were eligible for the exemption under Notification No.64/88-Cus. under Entries 1 & 3 alternatively.

9.   The factual position being distinct and different from the main matter heard by this Hon'ble Tribunal, the Hon'ble Tribunal ought to have appreciated the difference  in  the  facts  and  ordered  accordingly.  The  non-appreciation  and/  or improper appreciation of facts has resulted in an error apparent on the face of the record in the Order dated 19.1.2006.

10. The Hon'ble Tribunal has failed to appreciate that if  the obligations under Entry 2 in the table annexed to Notification 64/88 is a continuing obligation, the compliance with the obligation will also be in the nature of a continuing compliance i.e. it will have to be measured over the entire useful life of the equipment and not at any  periodic  rests.  In  the  applicants'  case,  from  the  date  of  the  import  of  the

equipment until the destruction of the said equipment in the riots as aforesaid, the applicants have satisfied both the in-patient reservation criterion and the out patient free treatment criterion. There was, therefore, no breach of the continuing obligation by the applicants."

We have been informed at the Bar that the Registry of Central

Excise and Service Tax Appellate Tribunal  does not entertain an application of this

nature and, thus, the same was necessarily required to be labelled as application for

rectification of  mistake,although,  in view of Prayer (a) made therein it  was for all

intent and purport an application for review and/or recall of the order passed by the

Tribunal.

The Tribunal by an order dated 12.10.2007 dismissed the said

application holding that the same was

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barred by limitation on the premise that  the Tribunal's final order was passed on

19.1.2006 and the application for

rectification of mistake should have been filed within six

months from the said date. It was, furthermore, opined that

the Tribunal had no power to condone the delay by reason of the impugned judgment.

As noticed hereinbefore, the High Court refused to interfere therewith.

Mr.  S.  Ganesh,  learned  senior  counsel  appearing  on  behalf  of  the

appellants would contend that having regard to the peculiar facts and circumstances

obtaining in the instant case, the Tribunal must be considered to have acted illegally

and  without  jurisdiction  in  so  far  as  it  failed  to  take  into  consideration  that  all

Tribunals had inherent power to recall their order.  

Mr.  Abhichandani,  learned  senior  counsel  appearing  on  behalf  of  the

respondents, on the other hand, supported the impugned judgment.

Indisputably,  the  Tribunal  considered  the  appeals  preferred  by  the

appellants  along with  the appeals  preferred by two others.  It  has  been contended

before us that Dr. Balabhai Nanavati Hospital had filed  Customs Appeal Nos. 61 and

62 of 2006  thereagainst before the High Court which had been allowed by an order

dated 11.1.2007.

From  the Tribunal which is the final Court of fact, an assessee is entitled

to obtain a judgment wherein all its  contentions have been considered. If what has

been contended

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before us by the appellants, namely, it indeed had complied with all the conditions laid

down in the Notification are correct and, thus, was not liable to pay any redemption

fine or penalty, the Tribunal was bound to consider the said contention.

Apparently, learned Tribunal only considered the factual matrix involved

in the case of M/s Miraj Medical Centre W. Hospital and not the factual aspect of the

matter  involving  factual  matrix.  Appellants'  case  had  purported  to  have  been

determined on the  question  of  law without  taking  into  consideration  the  question

whether  the  law  so  laid  down  by  the  Tribunal  is  applicable  to  the  fact  of  the

appellants' case or not.

It is true that the period of limitation specified in terms of Sub-Section (2)

of Section 129(B) of the Customs Act is required to be observed  but the Tribunal

failed to notice that it has inherent power of recalling its own order if sufficient cause

is shown therefor. The principles of natural justice, which in a case of this nature, in

our opinion, envisage that a mistake committed by the Tribunal in not noticing the

facts involved in the appeal which would attract the ancillary and/or incidental power

of  the  Tribunal  necessary to discharge  its  functions  effectively  for  the  purpose  of

doing justice between the parties, were required to be complied with.

While the judges' records are considered to be final, it is now a trite law

that when certain questions are raised

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before the Court of law or Tribunal but not considered by it, and when it is brought

to its notice, it is the only appropriate authority to consider the question as to whether

the said contentions  are correct or not.

For the aforementioned purpose the provisions  of  limitation specified in

Sub-section (2) of Section 129 B of

the Customs Act would not be attracted. We, however, do not mean to lay down a law

that such an application can be filed at any time. If such an application is filed within

a reasonable time and if the Court or Tribunal finds that the contention raised before

it by the applicant is prima-facie correct, in order to do justice, which is being above

law, nothing fetters the judges hands from considering the matter on merit.

We  may  notice  that  this  Court  in   Grindlays  Bank  Ltd.  Vs.  Central

Government  Industrial  Tribunal  and  Ors.  -  1980(Suppl)  SCC  420,  held  that

Industrial Tribunal has an inherent power to set aside an ex-parte award subject of

course to the condition that the same has not been published in the Gazette.

Grindlays Bank Ltd.[supra] has been followed by this Court in  Sangham

Tape Co. v. Hans Raj [(2005)9 SCC 331], stating:

"8. The said decision is, therefore, an authority for the  proposition  that  while  an  Industrial  Court  will  have jurisdiction  to  set  aside  an  ex  parte  award,  but  having regard to the  provision contained in Section 17-A of the Act, an application

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therefor must be filed before the expiry of 30 days from the publication  thereof.   Till  then  the  Tribunal  retains jurisdiction over the dispute referred to it  for  adjudication,  and  only  up  to  that  date,  it  has  the power to entertain an application in connection with such dispute.

9. It  is not in dispute that in the instant case, the High Court found as of fact that the application for setting aside the award was filed before the Labour Court after one month of the publication of the award.

10. In  view  of  this  Court's  decision  in  Grindlays Bank such jurisdiction could be exercised by the  Labour Court  within  a  limited  time frame,  namely,  within  thirty days from the date of publication of the award.  Once an award becomes enforceable in terms of Section 17-A of the Act, the Labour Court or the Tribunal, as the case may be, does not retain any jurisdiction in relation to setting aside of an award passed by it. In other words, upon the expiry of 30 days from the date of  publication of  the award in the gazette,  the same having  become enforceable,  the Labour Court would become functus officio".

Yet again in  Rabindra Singh v.  Financial   Commissioner,  Cooperation,

Punjab & Ors. [2008(8)SCALE 242], this Court held:

"17. What  matters for exercise of jurisdiction is  the source of power and not the failure to mention the correct provisions  of  law.   Even  in  the  absence  of  any  express provision having regard to the principles of natural justice in such a proceeding, the courts will have ample jurisdiction to set aside an ex parte decree, subject of course to the statutory interdict."

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This Court, however, in a slightly different  context in Jet Ply Wood (P)

Ltd. and Anr. vs. Madhukar Nowlakha & Ors [(2006) 3 SCC 699] opined that even

an order

permitting withdrawal of a suit can be allowed to be recalled by a civil  court in

exercise of its inherent power.

It is  only from that point  of view this Court passed the aforementioned

order dated 13.4.2007.  

It may be true,  as has been contended by Mr. Abhichandani,

learned  senior  counsel  that  Section  14  of  the  Limitation  Act,  1963  will  have  no

application in view of the fact that provisions governing limitation are contained in

the Customs Act. It is so for in a matter of this nature  the Tribunal was required to

consider the  application filed by he appellant which was filed within a reasonable

time. It should have also considered that the appellant had been bonafide pursuing its

remedies before this Court.

We may place on record  that for all intent and purport, this Court had

granted liberty to the appellants  to take recourse to the remedies suggested by its

counsel  as  the  word  'accordingly'  has  been  used  before  the  words  'the  appeal  is

dismissed as withdrawn'.

The Tribunal did not consider the matter on merit. The Tribunal failed to

take into consideration that, ipso-facto, in a case of this nature provisions of Section

129B of the Customs Act as such has no effect. Label of an

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application is not decisive for consideration by the Tribunal as to whether a case has

been made out to hear the application on merit, particularly, having regard to the

grounds set out therein.

For the reasons aforementioned, we in exercise  of our jurisdiction under

Article  142 of  the  Constitution  of  India  set  aside  the  impugned  judgment  with  a

direction  to  the  Tribunal  to  hear  out  the  appellants  afresh  on  merit  on  the  said

application.

The  appeal  is  allowed.  There  shall,however,  be  no  order  as  to  costs.

   ...............J.      [S.B. SINHA]

    .................J                                     [ CYRIAC JOSEPH ]

New Delhi, November 17, 2008.

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