1990 (11) TMI 405 - AT - Central Excise

Summary

Issues Involved:
1. Entitlement to rebate of cess paid on motor vehicles exported under Notification No. 197/62-C.E., dated 17-11-1962 issued under Rule 12 of the Central Excise Rules.

Detailed Analysis:

1. Entitlement to Rebate of Cess Paid on Motor Vehicles Exported

Background:
The respondents, manufacturers of motor vehicles, sought a rebate of automobile cess paid on exported motor vehicles, which was initially rejected by the Assistant Collector (Refunds). The Collector (Appeals) allowed the rebate, leading to the Department's appeal.

Arguments by Appellant (Department):
- The appellant contended that although the provisions of the Central Excises & Salt Act, 1944, and the Rules made thereunder, including refund of duty, apply to the levy and collection of cess, the Collector (Appeals) erred by not considering Rule 12 and the definition of "duty" under Rule 2(v) of the Central Excise Rules.
- Rule 12 requires a specific notification for granting rebate, and the notification issued under Rule 12 did not invoke Rule 3 of the Automobile Cess Rules, 1984.
- The appellant referenced the Special Bench-D judgment in Nellimarla Jute Mills and the Supreme Court judgment in Modi Rubber Limited, asserting that exemptions under Rule 8(1) do not automatically apply to cess without a specific notification.

Arguments by Respondent:
- The respondent argued that cess is a duty of excise, and the provisions of the Central Excise Act and Rules, including Rule 12, apply to cess.
- Notification No. 197/62 issued under Rule 12 refers to all excisable goods, including motor vehicles, and therefore should cover cess paid on these goods.
- Cited decisions: Andhra Pradesh Paper Mills Ltd., Mahabir Jute Mills Ltd., and Mata Prasad Anantram, to support that cess is considered excise duty and the provisions of the Central Excise Act apply to cess.

Tribunal's Findings:
- The Tribunal noted that the appellant did not contest that automobile cess is collected as a duty of excise and that the provisions of the Central Excise Act and Rules apply to the levy and collection of cess.
- The main contention was whether a specific notification under Rule 12 read with Rule 3 of the Automobile Cess Rules is necessary for granting rebate of cess.
- The Tribunal referred to the Special Bench decision in Nellimarla Jute Mills and the Supreme Court decision in Modi Rubber Ltd., which established that exemptions or rebates under Rule 8(1) or Rule 12 require specific notifications invoking the relevant provisions of the Cess Act or Rules.
- The Tribunal concluded that since no notification under Rule 12 read with Rule 3 of the Automobile Cess Rules was issued, the rebate of cess on exported motor vehicles could not be granted.

Conclusion:
The Tribunal allowed the appeal by the Department, set aside the order of the Collector (Appeals), and restored the order of the Assistant Collector, denying the rebate of cess on exported motor vehicles. The stay application was dismissed as it did not survive for consideration.