Automobile cess on body-building activity: tribunal treated prior payment on chassis as creating a strong prima facie case for stay.

An independent body builder who builds and mounts a body on a chassis already cleared on payment of automobile cess was found to have a strong prima facie case for interim relief. Relying on the Board circular and prior tribunal view, CESTAT held that automobile cess was not intended to be levied again on the body builder where cess had already been discharged on the chassis manufacturer's clearance. On that basis, pre-deposit of the cess demand, interest and penalty was waived and recovery was stayed pending disposal of the appeal.

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Issues: Whether, in the facts of the case, the appellant had made out a prima facie case for waiver of pre-deposit of automobile cess, interest and penalty and for stay of recovery pending disposal of the appeal.

Analysis: The demand arose from the activity of building and mounting a body on chassis received from the chassis manufacturer, who had already discharged automobile cess at the time of clearance. The Tribunal relied on the Board circular and the earlier tribunal view that an independent body builder is not intended to be fastened with automobile cess again where cess has already been paid on the chassis. On that footing, the Tribunal found that the appellant had shown a strong prima facie case for interim relief.

Conclusion: Pre-deposit of the automobile cess demand, interest and penalty was waived and recovery was stayed pending disposal of the appeal.

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