2018 (11) TMI 828 - AT - Central Excise

Levy of Tractor cess on the parts and accessories of the Tractors - Notification dated 06.09.1985 - appellant submitted that on perusal of the notification regarding imposition of tractors cess, it is evident that cess is leviable on tractor and not on the parts, components and accessories thereof - Held 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 - Circular No. 41/88, dated 31.08.1988 issued by the Ministry of Finance, New Delhi regarding levy of cess on automobiles also goes in favor of appellant - appeal allowed - decided in favor of appellant.

Summary

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

Analysis:
The case involved an appeal against an order passed by the Commissioner (Appeals) upholding the imposition of tractor cess on parts and accessories of tractors. The appellant was accused of contravening the provisions of the Industrial (Development and Regulation) Act, 1951 by not paying the tractor cess. The appellant argued that the cess is leviable only on tractors and not on their parts based on the notification. The appellant cited relevant case laws and circulars to support their argument, emphasizing that the cess should be realized from vehicle manufacturers and not from body builders. The appellant contended that the Commissioner did not consider the relevant provisions and did not address the issue of cess application on tractor parts properly.

The Tribunal analyzed the case laws cited by the appellant and the circular issued by the Ministry of Finance. It concluded that tractor cess cannot be imposed on parts and accessories of tractors as they are distinct from the tractors themselves. The Tribunal drew support from a CBEC circular related to automobile cess, stating that the principle enunciated in the circular is applicable in the current case. Therefore, the Tribunal set aside the impugned orders and allowed the appeals with any consequential relief.

In summary, the Tribunal decided that tractor cess is not leviable on parts and components of tractors cleared by the appellant based on the notification and relevant circulars. The Tribunal's decision was influenced by the distinction between tractors and their parts, as well as the principle established in a circular related to automobile cess.