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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 ..... issued, which provides that the rate of cess shall not, in any cess, exceeds to two percent of the value of the goods i.e. 1/8th per cent of the value of vehicle. It was also clarified that the cess may continue to be levied and collected 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 chassis. Therefore, there was no intention of the Administrative Ministry to levy cess on the activity of the body building. In that case, although the appellant may be the manufacturer in the light of the Chapter Note 5 of the Chapter 87 of the Central Excise Act, 1985, the automobile cess cannot be levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cess alongwith interest and penalties were also proposed. The demands alleged in the show cause notice were confirmed alongwith interest by the adjudicating authority and penalties were dropped. Against the said order, both the sides fil,ed appeals before the Commissioner (Appeals), the department against droppig the penalty by the adjudicating authority and the appellant against the order of demanding automobiles cess from the appellant. The Id. Commissioner (Appeals) confirmed the demand al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es , 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 as per Chapter Note 5 of the Chapter Note 87 of CETA and as per the Automobiles Cess rules, 1984, the manufacturers of automobiles are required to pay cess. In that sense, the appellant are required to pay automobile cess on their activity and the CBEC's Circular has no relevance to that. In these circumstances, the impugned orders are to be upheld. 5. Heard the parties, considered the submissions. 6. In this case, a short issue before us is whether the appellant being job worker i.e. manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 levied and collected accordingly. Trade interests should also be suitably informed. 7. On introducing the said circular, we find that the matter of levy of automobile cess was referred to Administrative Ministry i.e. Ministry of Industries and as intimated the intention behind the notification levying the cess is to realize from the vehicle manufacturers and not from the body builders. Further, as per IDR Act, 1951, the notification levying of cess has been Issued, which provides that the rate of ces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assis 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 and this Tribunal held that as the body builder are not required to pay cess. Cess paid on chassis in this case also on chassis M/s. Tata Motors have paid the cess. Therefore, we hold that the appellants are not required to pay cess as the body on cess paid chassis is built by the appellants. Therefore, demand of cess on automobile is set aside. 8. In these circumstances, we hold that the automobile cess cannot be demanded from the appellant. Therefore, the demand on account of automobile cess along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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