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TMI Blog2016 (9) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. The appellant was paying automobile cess on the body building manufacture till 2005 but stopped paying automobile cess thereafter on the insistence of chassis suppliers, who had already paid automobile cess on the value of the chassis in terms of CBEC Circular No. 4/88 dated 31.08.88. the appellant filed refund claims before the department for automobiles cess paid during earlier period. Subsequent to that in view of Chapter Note 5 to Chapter 87 in the Central Excise Tariff Act, 1985, the body building activity was considered to be amounting to manufacture. Therefore, as per Revenue, automobile cess was required to be paid by the appellant. In these circumstances, show cause notices were issued to the appellant for demanding automobile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87 of CETA, the activity of the body building amounts to manufacture. Therefore, the Circular dated 31.08.1988 has lost its relevance and the Chapter Note 5 of Chapter 87 was introduced later. He further submits that Rule 2 (f) of the Automobile Cess Rules, 1984 clearly lays down that, "words and expression used in this rules and not defined in these Rules but defined in central Excise Act, 1944 or the Rules made there under shall have the meaning respectively assigned to them in that Act or the Rules", therefore, the word "manufacture" in Section 9(1) of the Industries (Development and Regulation) Act, 1951, one has to look into the definition of Central Excise Act, 1944. Therefore, the appellants are the manufacturer of the automobiles a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to realize such levy from the vehicle manufacturers and not from the body builders. Further, the provisions of IDR Act, 1951, under which the notification levying the cess has been issued, provides that the rate of cess shall not in any case exceed two annas per cent of the value of the goods. If the cess is levied in line with the Excise Tariff Act, 1985, this would exceed the maximum rate of 1/8th per cent prescribed in the IDR Act. Therefore, the cess may continue to be levied and collected on the vehicles in the condition they are cleared from the premises of the manufacturers and no cess should be levied again in case the body on the chassis is built by an independent body builder on the cess paid chasis. The cess should be l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) is squarely applicable to the facts of this case, wherein this Tribunal has held as under:- "9. We further find that another issue in this matter is that whether the appellants are required to pay cess on automobile or not. The CBEC Circular vide Circular No. 41/88, dated 31-8-1988, has clarified that the cess may continue to be levied and collected on the vehicles on the condition they are cleared from the premises of the manufacturers and no cess should be levied again in case the body on the chassis is built by an independent body builder on the cess paid chassis. In the case of S.M. Kannappa Automobiles P. Ltd. v. Commr. of C. Ex., Bangalore reported in 2008 (224) E.L.T. 467 (Tri.-Bang.), the issue came up before this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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