2015 (10) TMI 135 - AT - Central Excise

Waiver of pre deposit - levy of Automobile Cess. - Exemption from payment of duty - Notification No. 63/95 - Held that - In terms of the decision of the Hon ble High Court of H.P. in the case of Indo Farm Tractors & Motors Ltd. (2007 (7) TMI 150 - HIGH COURT, HIMACHAL PRADESH), the fact that the excisable item is exempted from excise duty does not lead automatically to the exemption of cess. - On going through the expression automobiles , as appearing in sub item 5 of Item 7 in 1st Schedule to the Industries (Development and Regulation) Act, 1955, we find that the same reads as under Automobiles (motor cars, buses, trucks, motor cycles, scooters and the like) , which indicates that all types of vehicles would get covered under the expression automobiles. - all the demands are within the period of limitation and the appellant has also not specifically pleaded any financial hardship and has not produced any evidentiary documents on record to that effect. As such, we are of the view that the appellant should be directed to deposit the entire amount of dues involved in all the four stay petitions - Partial stay granted.

Summary

Issues Involved:
- Dispute regarding imposition of automobile cess on vehicles exempted from excise duty
- Interpretation of the term "automobiles" under the Industries (Development and Regulation) Act, 1955
- Applicability of automobile cess to defense vehicles
- Financial hardship plea and deposit requirement

Analysis:

1. The judgment addresses the issue of imposition of automobile cess on vehicles exempted from excise duty under Notification No. 63/95. The appellant, engaged in manufacturing defense vehicles, contests the imposition of automobile cess based on the argument that defense vehicles are not covered under automobile industries subject to cess.

2. The appellant's advocate refers to the decision in the case of Info Farm Tractors & Motors Ltd., where it was held that exemption from excise duty does not automatically exempt cess. The appellant argues that defense vehicles are distinct from traditional automobiles and fall under defense industries, not automobile industries subject to cess.

3. The respondent argues that defense vehicles manufactured by the appellant fall under Chapter 87 of the Central Excise Act, making them subject to automobile cess. The respondent highlights the inclusive nature of the term "automobiles" under the Industries (Development and Regulation) Act, 1955, indicating that all types of vehicles are covered.

4. The Tribunal considers the definition of "automobiles" under the Act and the Automobile Cess Rules, noting that the term includes various types of vehicles. The Tribunal finds that defense vehicles manufactured by the appellant are covered under the term "automobiles," making them liable for automobile cess.

5. Additionally, the Tribunal notes that the demands are within the period of limitation, and the appellant has not demonstrated financial hardship or provided evidence to support such a claim. As a result, the Tribunal directs the appellant to deposit the entire amount of dues involved in the stay petitions within a specified period, with the waiver of pre-deposit and stay on recovery during the appeal period contingent on compliance.

6. The judgment emphasizes the interpretation of statutory provisions, the scope of exemptions, and the applicability of cess to specific industries. It underscores the importance of legal definitions and precedents in determining liability for duties and cess, while also considering factors such as financial hardship in granting relief to appellants.