1994 (8) TMI 255 - AT - Central Excise

Summary

Issues:
Valuation for payment of automobile cess under Section 9(1) of the Industries (Development and Regulation) Act, 1951.

Detailed Analysis:

1. Valuation for Cess Payment:
In the appeal filed by M/s. Ashok Leyland Limited, the issue revolved around the valuation for payment of automobile cess under Section 9(1) of the Industries (Development and Regulation) Act, 1951. The assessee had been paying the cess on the motor vehicles cleared based on the assessable value declared under Section 4 of the Central Excises and Salt Act, 1944. The Revenue contended that the value for cess collection should include the Central Excise duty leviable under the Act.

2. Interpretation of Section 9 of IDR Act:
Section 9 of the IDR Act allows for the imposition of a duty of excise as a cess for the Act's purposes. The explanation under Section 9 defines the "value" of goods for cess calculation, aligning it with the wholesale cash price without deductions except for trade discount and duty payable. Rule 2(f) of the Automobile Cess Rules, 1984, mandates using Central Excise Act definitions for terms not specified.

3. Precedent and Interpretation:
The Tribunal referred to a previous case involving Tata Engineering and Locomotive Company Limited, where it was established that the valuation for cess should follow Section 4 of the Central Excises and Salt Act. The judgment emphasized that deductions like trade discount and excise duty payable should be considered in determining the cess value. The Tribunal rejected the argument to interchange "duty" with "cess" in this context, as it would lead to inconsistencies in calculation.

4. Application of Precedent:
The Tribunal also cited a subsequent case involving Escorts Limited, where the same principles were applied. Following these precedents, the appeal by M/s. Ashok Leyland Limited was allowed, granting them relief based on the deduction of Central Excise duty and Sales tax from the wholesale cash price for calculating cess.

5. Final Decision:
In conclusion, the Tribunal upheld the appeal, following the established precedent regarding the valuation for automobile cess payment under Section 9(1) of the IDR Act. The decision aligned with the interpretation that cess calculation should mirror the Central Excise duty collection method, allowing for deductions like trade discount and payable duty.