2016 (5) TMI 1064 - AT - Central Excise

Allowability of refund claim - motor vehicles sold as taxis- partial exemption allowed by notification no. 6/2006-CE dated 1st March 2016 - conditions of the exemption notification had been complied with except that the taxis were registered for a limited period of five years - Held that - in view of the decision of Tribunal in the case of Maruti Udyog Ltd. v. Collector of Central Excise New Delhi 1998 (8) TMI 399 - CEGAT, NEW DELHI which has been upheld by the Hon ble Supreme Court reported in 1999 (7) TMI 661 - SUPREME COURT , concessional rate of duty is subject to registration for use solely as taxi without any reference to the period of registration; it was, therefore, improper on the part of the lower authorities to insist upon a tenure that is not expressly stated there. The lower authorities should have borne this in mind considering that all other conditions stipulated for eligibility of the concessional rate have been complied with. - Decided in favour of appellant with consequential relief

Issues Involved:
1. Rejection of refund claims for partial exemption under notification no. 6/2006-CE.
2. Interpretation of the conditions of the exemption notification regarding taxi registration.

Detailed Analysis:

1. Rejection of Refund Claims:
The appellant, a manufacturer of motor vehicles, filed a batch of 24 appeals against the orders-in-appeal of the Commissioner of Central Excise & Customs, Aurangabad, which rejected refund claims amounting to Rs. 80,62,195/- for the period from January 2011 to March 2014. The rejection was based on the conditions stipulated in notification no. 6/2006-CE dated 1st March 2016.

2. Interpretation of Exemption Notification Conditions:
The appellant's vehicles, cleared on payment of duty and sold to dealers, were used as taxis, qualifying for a concessional excise duty rate. The scheme required manufacturers to pay full excise duty initially and claim a refund upon submission of proof of taxi registration by the buyer. The jurisdictional Assistant Commissioner rejected the claims, citing that the vehicles were registered as taxis for a limited period of five years, which was deemed contradictory to the notification's conditions requiring registration for sole use as a taxi.

The Tribunal observed that the literal interpretation of the exemption notification did not specify a permanent registration period for taxis. It noted that even privately owned vehicles are registered for a limited period (fifteen years), subject to extension based on road-worthiness. Therefore, it was unreasonable to insist on permanent registration for taxis.

Legal Precedents and Interpretation:
The appellant relied on previous decisions, including Maruti Udyog Ltd. and Premier Automobiles, which supported their claims. The Tribunal referenced the Supreme Court's decision in Qazi Noorul H.H.H. Petrol Pump, emphasizing the literal rule of interpretation, which mandates adherence to the statute's wording without inferring additional conditions not explicitly stated.

The Tribunal concluded that the lower authorities' insistence on a permanent registration period was improper and not aligned with the exemption notification's conditions. The decision in Maruti Udyog Ltd., upheld by the Supreme Court, was cited, reinforcing that the manufacturer's responsibility was to produce a certificate of taxi registration, and the department should verify the certificate's genuineness, not the vehicle's continued use as a taxi.

Conclusion:
The Tribunal allowed the appeals, granting consequential relief to the appellant. It highlighted that the lower authorities should have considered the reality of vehicle registration regulations and adhered to the literal interpretation of the exemption notification, which did not mandate a permanent registration period for taxis.

Final Judgment:
The appeals were allowed with consequential relief, emphasizing the literal interpretation of the exemption notification and the genuineness of the taxi registration certificates provided by the appellant.

← Previous Next →