2018 (10) TMI 534 - AT - Central Excise

Levy of Tractor Cess - whether the tractor cess is leviable on the part and component of the tractor cleared by the appellant? - Held that - It is clear that part and accessories etc. of the tractor cannot be compared with that of the tractor itself. Therefore, the tractor cess is not leviable thereon in terms of Notification dated 06.09.1985. CBEC Circular No. 41/88, dated 31.08.1988 in the case of parts and accessories of the automobile which clearly goes in favour of the appellant - aforesaid circular is with reference to automobile cess but the principle enunciated there is squarely applicable in the instant case. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether tractor cess is leviable on parts and accessories of tractors.

Analysis:
The appeals were filed against the Order-in-Appeal upholding the imposition of tractor cess on parts and accessories of tractors. The appellant was accused of not paying tractor cess on cleared parts during a specific period, allegedly contravening relevant regulations. The appellant argued that tractor cess is only applicable to tractors, not their parts, citing case laws and circulars supporting this claim. The Advocate highlighted that the notification does not specify parts and accessories for cess imposition. The Revenue, however, supported the original order.

The Tribunal analyzed whether tractor cess should be imposed on tractor parts and components. Referring to case laws and a Ministry of Finance circular, it was concluded that parts and accessories of tractors cannot be equated with the tractors themselves for cess imposition. The Tribunal found support in a CBEC Circular related to automobile cess, stating that the principle applies to the current case. Consequently, the impugned orders were set aside, and the appeals were allowed with any necessary relief, pronouncing the judgment on 09.10.2018.