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2016 (9) TMI 574 - CESTAT CHANDIGARH

2016 (9) TMI 574 - CESTAT CHANDIGARH - 2016 (341) E.L.T. 290 (Tri. - Chan.) - Whether the appellant being job worker i.e. manufacturer of body building is required pay automobile cess or not as per Automobile Cess Rules, 1984 read with industries (Development and Regulation) Act, 1951 or not - Held that:- on introducing the Circular No. 41/88 dated 31st August, 1988 by CBEC, the matter of levy of automobile cess was referred to Administrative Ministry i.e. Ministry of Industries and as intimated .....

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' of the manufacturers and no cess should be levied again in case the body on the chassis is built by an independent body builder on the cess paid chassis. - Therefore, there was no intention of the Administrative Ministry to levy cess on the activity of the body building. In that case, although the appellant may be the manufacturer in the light of the Chapter Note 5 of the Chapter 87 of the Central Excise Act, 1985, the automobile cess cannot be levied or collected from the appellant. Ther .....

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(Judicial) and Mr. V. Padmanabhan, Member (Technical) Sh. Gagan Kohli, Advocate- for the Appellant Sh. Atul Honda, AR- for the Respondent ORDER The appellant has filed these appeals against the impugned orders demanding education cess and imposing penalty thereon. 2. The facts of the case are that the appellant is engaged in the manufacture of buses/fabrication of bus bodies on duty paid chassis supplied by M/s Eicher Motors and others. The appellant was paying automobile cess on the body build .....

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ture. Therefore, as per Revenue, automobile cess was required to be paid by the appellant. In these circumstances, show cause notices were issued to the appellant for demanding automobile cess alongwith interest and penalties were also proposed. The demands alleged in the show cause notice were confirmed alongwith interest by the adjudicating authority and penalties were dropped. Against the said order, both the sides fil,ed appeals before the Commissioner (Appeals), the department against dropp .....

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mbai) and their own case vide final order no. 52854-52855/ 2015 dated 07.09.2015, therefore, the issue no longer res-integra and consequently, the appeals be allowed. 4. On the other hand, Id. Authorized Representative opposed the contention of the Id. Counsel and submits that in the case of Tata Motors ltd. (Supra), this Tribunal has relied on the CBEC Circular No. 41/88 dated 31.08.1988 but the same is not applicable to the facts of this case as in this case, the automobile cess was' sough .....

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rules and not defined in these Rules but defined in central Excise Act, 1944 or the Rules made there under shall have the meaning respectively assigned to them in that Act or the Rules", therefore, the word "manufacture" in Section 9(1) of the Industries (Development and Regulation) Act, 1951, one has to look into the definition of Central Excise Act, 1944. Therefore, the appellants are the manufacturer of the automobiles as per Chapter Note 5 of the Chapter Note 87 of CETA and a .....

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not as per Automobile Cess Rules, 1984 read with industries (Development and Regulation) Act, 1951 or not. We find that CBEC issued a circular no. 41/88 dated 31.08.1988, which is reproduced as under:- "Circular No. 41/88 dated 31st August, 1988 Cess on automobile not to be levied again in case the body on the chassis is built by an independent body builder. Subject: Levy of Cess on automobiles consequent upon the introducing of new Central Excise Tariff, 1985- Clarification regarding. Dou .....

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rs. Further, the provisions of IDR Act, 1951, under which the notification levying the cess has been issued, provides that the rate of cess shall not in any case exceed two annas per cent of the value of the goods. If the cess is levied in line with the Excise Tariff Act, 1985, this would exceed the maximum rate of 1/8th per cent prescribed in the IDR Act. Therefore, the cess may continue to be levied and collected on the vehicles in the condition they are cleared from the premises of the manufa .....

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e manufacturers and not from the body builders. Further, as per IDR Act, 1951, the notification levying of cess has been Issued, which provides that the rate of cess shall not, in any cess, exceeds to two percent of the value of the goods i.e. 1/8th per cent of the value of vehicle. It was also clarified that the cess may continue to be levied and collected in the condition they are cleared from the premises' of the manufacturers and no cess should be levied again in case the body on the cha .....

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