2015 (7) TMI 64 - AT - Central Excise

Denial of SSI Exemption - Valuation u/s 4A - Held that - Goods which would be falling under Section 4A would be parts, components and assemblies of automobiles. The meaning of the said extraction as understood by an ordinary human being would be relatable to such goods without which an automobile or taxi cannot run. Admittedly an automobile or a taxi can operate without even fixing the fair meters. In such a scenario, they cannot be termed as parts, components or assembly of taxies. Accordingly we are of the view that appellant has a good prima facie case in its favour so as to allow the stay petition unconditionally. - As the appellant has deposited the entire amount of service tax along with interest and 35% of the penalty - stay granted.

Summary

Issues: Classification of fare meters as parts of automobiles under Section 4A of Central Excise Act; Demand of duty raised by Revenue; Prima facie case in favor of the appellant.

Classification of Fare Meters: The case revolved around whether electronic taxi/auto fare meters should be classified as parts, components, and assemblies of automobiles under Section 4A of the Central Excise Act. The Commissioner (Appeals) analyzed the issue and noted that the meters are essential for the functioning of taxis or autos used as public transport. The appellant argued that the meters were not indispensable for the operation of automobiles since they could function without them. The Commissioner found in favor of the appellant, stating that the meters did not fall under Section 4A as they were not crucial for the operation of taxis or autos.

Demand of Duty: The Revenue contended that the fare meters should have been subjected to duty under Section 4A of the Central Excise Act, which would have resulted in the appellant exceeding the exemption limit earlier than they did. Consequently, a demand of Rs. 15,00,000 was raised against the appellant, and this demand was upheld by the lower authorities. However, the Tribunal considered the arguments presented by both sides and ultimately allowed the appellant's stay petition, as they had already paid the entire service tax amount along with interest and a portion of the penalty. The Tribunal dispensed with the requirement for the pre-deposit of the remaining penalty amount.

Prima Facie Case: The Tribunal acknowledged that the appellant had a strong prima facie case in their favor, leading to the decision to allow the stay petition without the need for further deposit of the balance penalty amount. This decision was based on the understanding that the fare meters were not integral parts, components, or assemblies of taxis or autos, as clarified by the Commissioner's analysis of the issue. The Tribunal's ruling favored the appellant's position in this regard, emphasizing their prima facie case as a determining factor in allowing the stay petition.