2003 (8) TMI 432

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.... issue on merit has been decided by the Supreme Court in their own case - B.H.E.L. v. CC & CE, Indore - 2003 (154) E.L.T. 10 (S.C.). 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 show 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 Com....

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.... no Excise duty is payable on that part. It has been held by the Supreme Court that "in order to promote sales manufacturers and dealers very often after incentives e.g. supply of free T.V. or some other equipment or goods. One of the incentive offered is a warranty to replace a part within a particular period. Merely because manufacturers and dealers choose to offer such incentive does not mean that goods which is otherwise excisable, should be exempted from paying Excise duty. When offering the incentive, the manufacturer or dealer is choosing to take upon himself the cost of that goods. So far as the Revenue is concerned that goods remain excisable." In view of this the duty is payable by the Appellants on the warranty free replacement. ....