Bharat Heavy Electricals Ltd. vs Commissioner Of Cus. & C. Ex., Indore

The Supreme Court upheld the Tribunal's decision that excise duty is payable on parts replaced under warranty, rejecting the argument that such parts have a zero value. The Court clarified that the 'complaint reserve' charged at the time of sale does not exempt the manufacturer from excise duty on replaced parts, as the total price includes this reserve and does not imply a double levy. The Court affirmed that the excise duty applies regardless of whether the part is replaced free of cost during the warranty period.