Ece Industries Ltd v. Commissioner Of Central Excise, New Delhi

1. This appeal is against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal dated 4-3-1999. The question is whether the parts used for repair or replacement during the warranty period are excisable. This question is answered by a decision of this Court rendered on 25-3-2003 in Civil Appeals Nos. 3643-44 of 1999. On the principles laid down in that decision, it is held that duty is payable on the parts.

2. However, in this case a further question arises i.e. whether in respect of the show cause notice concerned dated 27-5-1994, the respondents were entitled to invoke the extended period of limitation under S.11A of the Central Excise Act, 1944. The Tribunal negatived the contention of the appellant and held that there was suppression and, therefore, the extended period of limitation was available.

3. Some few facts necessary for a decision on this point are as follows: The 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 28-5-1993 and 4-11-1993. 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 2-3-1994. Thereafter, the show cause notice concerned dated 27-5-1994 was issued. This has been adjudicated by an order dated 13-11-1997.

4. In the case of P&B Pharmaceuticals (P) Ltd. v. CCE, 2003 (3) SCC 599 [LQ/SC/2003/251] : AIR 2003 SC 4019 [LQ/SC/2003/251] the question was whether the extended period of limitation could be invoked where the Department has earlier issued show cause notices in respect of the same subject matter. It has been held that in such circumstances, it could not be said that there was any wilful suppression or misstatement and that, therefore, the extended period under S.11A could not be invoked.

5. In our view, the principles laid down in the above case fully apply here. As earlier proceedings in respect of the same subject matter were pending adjudication it could not be said that there was any suppression and the extended period under S.11A was not available.

6. To this extent the impugned judgment requires to be and is set aside. Ordered accordingly.

7. It must also be mentioned that as there is no suppression, penalty cannot be imposed.

8. The appeal stands disposed of accordingly. There will be no order as to costs.