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<h1>Tribunal upholds Tractor Cess demand, sets aside penalty under Central Excise Rules</h1> The Tribunal upheld the demand for Tractor Cess at the rate of 1/8% on tractors cleared by the appellant from June 2001 to December 2001, citing the ... Levy of Automobile Cess on tractors - Whether Cess would be applicable on the Tractors cleared by the appellant during the period of Jun 2001 to Dec 2001 - Held that:- Appellant are liable to pay @18% even though in the demand notice it was proposed to be recovered under Sr. No. 7 while tractors are more specifically covered under Sr. No. 10. We observe that even Sr. no. 7 is wide enough to cover the said goods. However, since tractors are specifically listed in Sr. No. 10, these will be covered by Sr. No. 10. However the rate of Cess is same viz. 1/8% and will not make any difference in the quantum of demand and accordingly we upheld the demand. - penalty has also been imposed under Rule 173Q of Central Excise Rules, 1944 on the appellant - Decided partly in favour of assessee. Issues:- Applicability of Cess on Tractors cleared by the appellant during Jun 2001 to Dec 2001.Analysis:The appellant contended that a previous CESTAT order and a High Court judgment supported their position that Automobile Cess is not applicable on tractors. They argued that the appeal should be allowed based on this precedent. On the other hand, the Additional Commissioner argued that Cess is leviable under Section 9 of the IDRA Act and specified that Cess is applicable on goods listed in the schedule, including agricultural machinery and tractors. The Commissioner highlighted that a Board's Circular was issued to clarify the position after the High Court judgment. The Tribunal noted that both Automobile Cess and Tractor Cess are leviable at 1/8% under Section 9 of the IDRA Act. They referenced the Board's circular post the High Court judgment, clarifying the levy of Cess on tractors under the Tractor Cess Rules, 1992. The Tribunal concluded that tractors are chargeable to tractor Cess, even though the demand notice initially proposed recovery under a different category. They upheld the demand for Cess at the rate of 1/8% but set aside the penalty imposed under the Central Excise Rules, 1944. The appeal was partly allowed based on these findings.
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