2003 (3) TMI 136 - SC - Central Excise

Extended limitation under s.11A not available where prior proceedings pending; duty demands and penalties time-barred

SC held that, although parts used for warranty repairs had attracted Modvat credit and duty was not paid or reversed, the revenue could not invoke the ... Dutiability - Demand and penalty - Limitation - whether the parts used for repair or replacement during the warranty period are excisable - Held that:- Appellants were using parts, in respect of which the Modvat credit was availed. Even though they have not paid duty, they did not reverse the credit. The Department, therefore, issued show cause notices on 28th May, 1993 and 4th November, 1993. By these two show cause notices the appellants were called upon to show cause as to why duty and penalty be not levied on them for not having reversed the Modvat credit. These show cause notices were adjudicated by an order dated 2nd March, 1994. Thereafter, the concerned show cause notice dated 27th May, 1994 was issued. This has been adjudicated by an order dated 13th November, 1997. Following decision of P & B Pharmaceuticals (P) Ltd. v. Collector of Central Excise reported in [2003 (2) TMI 68 - SUPREME COURT OF INDIA] - As earlier proceedings in respect of same subject matter were pending adjudication it could not be said that there was any suppression and the extended period under Section 11A was not available. - Decided in favour of assessee. The Supreme Court held that duty is payable on parts used for repair during warranty period. Extended period of limitation under Section 11A not applicable if earlier show cause notices issued on same subject. No suppression means penalty cannot be imposed. Judgment set aside, appeal disposed of with no costs.