1988 (6) TMI 106 - AT - Central Excise

Summary

Issues:
- Interpretation of Automobile Cess Rules and Central Excises and Salt Act in relation to the levy of Cess on motor vehicles.
- Whether Central Excise duty and Sales-tax should be deducted from the wholesale cash price for calculating Cess.

Analysis:
1. The appeals involved the interpretation of the law regarding the imposition of Automobile Cess on motor vehicles under Tariff Item 34 of the CET. The appellants were issued a show cause notice for misdeclaration of wholesale cash price to evade payment of Cess duty.

2. The Collector confirmed the demand and imposed a penalty after observing that the assessable value for Cess should include Central Excise duty, Sales Tax, or any other tax. The appellants argued that only Cess and trade discount should be deducted from the wholesale cash price as per the relevant provisions.

3. The appellants contended that the value for Cess under Section 9 of the IDR Act should be the wholesale cash price minus only trade discount and duty payable. They referred to the Automobile Cess Rules and Central Excises and Salt Act to support their argument.

4. The JCDR argued that only Cess and trade discount should be deducted from the wholesale cash price for calculating Cess. He cited legal precedents and judgments to support his interpretation of the law.

5. The Tribunal analyzed the provisions of the IDR Act, Automobile Cess Rules, and Central Excises and Salt Act. They concluded that Central Excise duty and Sales-tax should be deducted from the wholesale cash price for calculating Cess, in line with Rule 3 of the Automobile Cess Rules and Section 4 of the Central Excises and Salt Act.

6. The Tribunal rejected the JCDR's argument that the word "duty" in the relevant provisions should be read as "Cess," emphasizing that the provisions clearly indicated the deduction of Central Excise duty and Sales-tax. They held in favor of the appellants, allowing their appeals based on the correct interpretation of the law.

7. The Tribunal's decision clarified that for calculating Cess on motor vehicles, Central Excise duty and Sales-tax should be deducted from the wholesale cash price. The judgment emphasized the importance of interpreting the relevant provisions accurately to determine the assessable value for Cess.