Larsen and Toubro Limited Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. when the matter was called none appeared on behalf of the appellants. however, they requested to decide the case on merits.accordingly, we proceed to pass this order after hearing shri d.s.negi, learned sdr for the revenue.2. the dispute is in respect of free clearance of goods for free replacement as per warranty/guarantee clause. according to the party, while replacing the goods as per guarantee clause some parts were supplied freely on which no duty is payable. the contention of the party is not sustainable since the goods are liable to duty at the time of clearance irrespective of warranty clause and this position has been properly analysed by the collector (appeals) in his order. last para of his order is as under :- "i have considered the matter and the submissions made by the appellants during the hearing and those submitted thereafter as per direction. it is seen from the copies of contracts /orders that the warranty/guarantee clauses in contracts is usual guarantee clause prevalent in the trade for sale of various guaranteed goods. there is no exemption notification issued under section 5a of the central excises & salt act, 1944 in respect of goods cleared for free replacement during the warranty period. moreover, there is also no documents on record showing that value of replacements under warranty was in the price list. the supply of new goods in place of old defective goods out of the manufactured goods will be subject to excise duty at the time of clearance. the appellant's reference, in support of their claim, to the cegat decision reported in 1988 (33) e.l.t. 481, 1988 (33) e.l.t. 787, 1988 (34) e.l.t. 662 also does not appear to be relevant, as in those cases the dispute was for valuation of excisable goods and not the question of duty exemption as in this case." since the issue has been properly considered by the collector (appeals) we do not find any infirmity in the impugned order and in the result, the appeal is dismissed.

Judgment:
1. When the matter was called none appeared on behalf of the appellants. However, they requested to decide the case on merits.

Accordingly, we proceed to pass this order after hearing Shri D.S.Negi, learned SDR for the Revenue.

2. The dispute is in respect of free clearance of goods for free replacement as per warranty/guarantee clause. According to the party, while replacing the goods as per guarantee clause some parts were supplied freely on which no duty is payable. The contention of the party is not sustainable since the goods are liable to duty at the time of clearance irrespective of warranty clause and this position has been properly analysed by the Collector (Appeals) in his order. Last para of his order is as under :- "I have considered the matter and the submissions made by the appellants during the hearing and those submitted thereafter as per direction. It is seen from the copies of contracts /orders that the warranty/guarantee clauses in contracts is usual guarantee clause prevalent in the trade for sale of various guaranteed goods. There is no exemption notification issued under Section 5A of the Central Excises & Salt Act, 1944 in respect of goods cleared for free replacement during the warranty period. Moreover, there is also no documents on record showing that value of replacements under warranty was in the price list. The supply of new goods in place of old defective goods out of the manufactured goods will be subject to excise duty at the time of clearance. The appellant's reference, in support of their claim, to the CEGAT decision reported in 1988 (33) E.L.T. 481, 1988 (33) E.L.T. 787, 1988 (34) E.L.T. 662 also does not appear to be relevant, as in those cases the dispute was for valuation of excisable goods and not the question of duty exemption as in this case." Since the issue has been properly considered by the Collector (Appeals) we do not find any infirmity in the impugned order and in the result, the appeal is dismissed.