TATA MOTORS LTD. Vs. COMMISSIONER OF C. EX.
LAWS(CE)-2015-2-45
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on February 18,2015

TATA MOTORS LTD. Appellant
VERSUS
COMMISSIONER OF C. EX. Respondents


Referred Judgements :-

INDO FARM TRACTORS & MOTORS LTD. V. UOI [REFERRED TO]


JUDGEMENT

P.K. Jain, J. - (1.)THE issue involved in the present case is whether Cess would be applicable on the Tractors cleared by the appellant during the period of Jun 2001 to Dec 2001. The appellant's contention is that in their sister company's case CESTAT vide order No. A/428 -432/08/C -I/EB, dated 8 -5 -2008 has held in favour of them. Ld. Counsel also submitted that Hon'ble High Court of Himachal Pradesh in the case of Indo Farm Tractors & Motors Ltd. v. UOI [2008 (222) E.L.T. 184 (H.P.)] has held that Automobile Cess is not applicable on tractors, the said order was upheld by the Hon'ble Supreme Court. Ld. Counsel also submitted that in view of the said position the appeal may be allowed.
(2.)LD . AR on the other hand submitted that Cess is leviable under Section 9 of the IDRA Act. He further submitted that Cess is applicable on the goods specified in the schedule. Further schedule of IDRA classified different goods under different headings. Serial No. 7 covers various equipments used in the transportation industries and covers 7 categories of equipments, the Serial No. 7(7) even covers items such as fork lift trucks and the like. Serial No. 10 covers agricultural machinery and tractors specifically listed in Serial (1). He further submitted that Hon'ble High Court of Himachal Pradesh was not made aware that there is a Cess on Tractor, rate of Cess is 1/8% which is applicable for other automobiles as well. Ld. AR submitted that Board's Circular No. , dated 4 -3 -2010 was issued to clarify the position, consequent to the judgment of Hon'ble High Court of Himachal Pradesh (supra). Ld. AR further submitted that in the Tribunal's judgment quoted by Ld. Counsel for the appellant, the demand was issued under the Tractor Cess and they took the plea that demand is confirmed as automobile Cess and now in the present case contrary stand. We have considered the rival submissions. It is observed that both the Automobile Cess and Tractor Cess are leviable at the rate of 1/8% and both are covered by Section 9 of the IDRA Act, 1951. We also note that consequent to the decision of Hon'ble High Court of Himachal Pradesh in the case of Indo Farm Tractors & Motors Ltd. (supra) position has been clarified by the Board vide Circular No. , dated 4 -3 -2010 as under:
Subject: Leviability of cess on tractors under Tractor Cess Rules, 1992 - reg.

It has been brought to the notice of the Board that Hon'ble High Court of Himachal Pradesh in the case of Indo Farm Tractors & Motors Ltd. v. UOI [2008 (222) E.L.T. 184 (H.P.)], has held that Automobile Cess Rules are not applicable for imposition of cess on tractors. The said judgment was upheld by the Hon'ble Supreme Court in CWP No. 895/2005. Subsequent to the said judgment, some of the manufacturers have stopped paying cess on the tractors manufactured by them.

2. A reference was made to the Ministry of Heavy Industry & Public Enterprises, the administrative ministry responsible for Automobile cess, to take suitable action consequent to the Court judgment. The Ministry of Heavy Industry & Public Enterprises has informed that cess on tractors is leviable under the Tractor Cess Rules, 1992 and related notifications issued by the administrative ministry. However, existence of these rules were not brought to the notice of the Hon'ble Courts and the Hon'ble Court has passed the order without having any occasion to consider these rules. In view of the said situation, the opinion of the Law Ministry was sought. Law Ministry has clarified that since the decision of the Hon'ble High Court was not rendered in the context of Tractor Cess Rules, 1992, therefore, it is legally correct to collect the tractor cess as per the law. Further, the Hon'ble High Court has also held that the cess on tractors can be recovered if the rules are framed by the Government. As the rules are already in existence, there is no bar on collection of cess. In this connection, it is mentioned that Ministry of Heavy Industry & Public Enterprises has clarified that the Tractor Cess Rules, 1992 were notified vide Notification No. S.O. 55(E), dated 19 -1 -1993 and these are still in existence. Further, cess at the rate of 1/8% ad valorem was levied vide Notification No. 662(E), dated 6 -9 -1985. Copies of the rules and the notifications are enclosed.

3. In view of above -mentioned legal position, it is clarified that tractors are chargeable to tractor cess in terms of the Tractor Cess Rules, 1992 read with the IDRA Act, 1951. Necessary steps to collect the cess may be taken.

In view of the said factual position we are of the view that appellant are liable to pay @ 1/8% even though in the demand notice it was proposed to be recovered under Sr. No. 7 while tractors are more specifically covered under Sr. No. 10. We observe that even Sr. No. 7 is wide enough to cover the said goods. However, since tractors are specifically listed in Sr. No. 10, these will be covered by Sr. No. 10. However the rate of Cess is same viz. 1/8% and will not make any difference in the quantum of demand and accordingly we upheld the demand. We find that penalty of Rs. 60,000/ - has also been imposed under Rule 173Q of Central Excise Rules, 1944 on the appellant. Keeping in view, the facts and circumstances of the case, we set aside the said penalty. The appeal is partly allowed in above terms.

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