B.H.E.L. Vs. C.C.E.

JUDGEMENT

(1.) The common issue involved in these three appeals, filed by M/s. Bharat Heavy Electrical Ltd., is whether duty of Excise is payable on the goods cleared by them as a free warranty replacement.

(2.) Shri Z.U. Alvi, learned Advocate, fairly mentioned that the issue on merit has been decided by the Supreme Court in their own case -B.H.E.L. vs. CC and CE, Indor -2003 (154) ELT 10 (SC). On the question of penalty imposed under Section 11AC of the Central Excise Act the learned Advocate submitted that there cannot be any suppression on their part as the department has earlier adjudicated the matters on this aspect alone on 6.12.91 and 18.6.98; that the present show cause notice have been issued for the period November, 1998 to June, 1999; that thus all the sow cause notices have been issued after both the Adjudicating orders passed by the Commissioner, Indore/Bhopal; that in addition immediately after the first Adjudication Order dated 6.12.91 the Appellants had addressed 3 letters to the Commissioner with copy to Asst. Commissioner and Suptz. seeking clarification and permission to knock off the provisions of 2.5% towards free warranty replacement from the contractual price since duty on replacement was held to be payable separately at the time of their clearance. He finally submitted that penalty under Rule 173Q of Central Excise Rules, 1944 is also not imposable as the issue involved is an issue of legal interpretation.

(3.) Countering the arguments Shri Vikas Kumar, learned SDR, submitted that in spite of Adjudication Order, the Appellants were clearing the free warranty replacement without payment of duty; that as such the goods wee being cleared by them without payment of duty and the penalty provisions contained in Rule 173Q will be invokable; that this clearance of the goods without payment of duty and without the cover of invoice under Rule 152A of the Central Excise Rules inspite of the Adjudication Order show the intention to evade payment of duty making provisions of Section 11AC invokable.