2006 (6) TMI 330 - AT - Central Excise

Summary

Issues:
1. Applicability of Cess under Industries Development and Regulation Act, 1951 on bus body manufacturers.

Analysis:
The appellants, engaged in manufacturing bus bodies, were demanded 1/8% of the value of goods cleared under the Industries Development and Regulation Act, 1951. The issue revolved around whether this Cess applied to them as manufacturers of vehicles or as body builders. The appellants argued that they were not vehicle manufacturers but only engaged in body building, thus the Regulation should not apply to them. They cited a Board's Circular in support, which was not accepted by the Commissioner. The Cess demand was Rs. 1,94,535, with a duty demand of Rs. 1,63,116 already paid and a penalty of Rs. 50,000 imposed.

Upon hearing both sides, the Tribunal found that the appellants had not manufactured vehicles, leading to the conclusion that the plea for paying 1/8% Cess on vehicle value was not sustainable as per the Board's Circular. It was noted that the Commissioner (Appeals) had dropped proceedings for an earlier period, unchallenged by the Revenue. The Tribunal was satisfied with the application of the Board's Circular in the current case. Consequently, the stay application was allowed unconditionally, waiving the pre-deposit of disputed amounts and staying recovery until the appeal's disposal. The appeal was scheduled for final hearing at a later date.