1992 (4) TMI 156 - AT - Central Excise

Summary

Issues:
- Calculation of Cess on tractors under Chapter Heading 8701.00 of the Central Excise Tariff Act, 1985.
- Alleged short levy of Cess by the department.
- Interpretation of Section 9 of the Industries (Development and Regulation) Act, 1951.
- Applicability of Central Excises and Salt Act for Cess valuation.
- Tribunal's previous decision in Tata Engineering and Locomotive Company Limited v. Collector of Central Excise, Patna.
- Department's appeal against the Tribunal's decision in the Supreme Court.

Analysis:
1. The appellants, engaged in tractor manufacturing, were paying Cess on assessable value with excise duty, but the department alleged short levy of Rs. 1,93,116 for April 1986 to July 1987. The dispute was over whether Cess should be calculated on wholesale price inclusive of excise duty and sales tax. The Additional Collector confirmed the demand, leading to the appeal before the Tribunal.

2. The appellants relied on a Tribunal decision in Tata Engineering case, arguing that Cess valuation should follow Section 4 of the Central Excises and Salt Act. They sought relief based on this precedent.

3. The revenue representative admitted the Tribunal's favorable decision in the Tata Engineering case but mentioned the department's appeal to the Supreme Court against it.

4. The Tribunal examined the case records and noted the Tata Engineering decision's interpretation. It held that Cess calculation should deduct Central Excise duty and Sales Tax from the wholesale price. This aligns with Section 9 of the IDR Act and Rule 3 of the Automobile Cess Rules. The Tribunal rejected the argument to equate 'duty' with 'Cess' and emphasized consistency with the Central Excises and Salt Act for Cess levy.

5. Following the Tata Engineering precedent, the Tribunal allowed the appeal, providing consequential relief to the appellants based on the correct Cess valuation methodology. The decision was in line with the interpretation of relevant statutes and rules, resolving the issue in favor of the appellants.