Automobile cess and pre-deposit waiver: broad reading of "automobiles" upheld, with stay conditioned on full deposit.

In a stay petition concerning automobile cess, the tribunal held that exemption from excise duty did not automatically extend to cess and that the expression "automobiles" in the relevant schedule and rules was broad enough to include the defence vehicles manufactured by the appellant. The Board circular on hydraulic excavators was treated as inapplicable. As the appellant also failed to establish financial hardship or support a claim for complete waiver, unconditional waiver of pre-deposit was refused. Waiver of the balance and stay of recovery were granted only on deposit of the entire duty demand within the stipulated period.

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Issues: Whether the appellant had made out a prima facie case for complete waiver of pre-deposit in a stay petition concerning automobile cess, and whether defence vehicles manufactured by the appellant could be treated as "automobiles" for the purpose of levy of automobile cess.

Analysis: The earlier decision that exemption from excise duty does not automatically extend to cess was treated as settled. The remaining question was whether the vehicles manufactured by the appellant fell outside the expression "automobiles" in Item 7 of the First Schedule to the Industries (Development and Regulation) Act, 1951 and Rule 2(b) of the Automobile Cess Rules, 1984. The expression "motor cars, buses, trucks, motor cycles, scooters and the like" was read as inclusive and broad enough to cover all types of vehicles. The cited Board circular concerning hydraulic excavators was found inapplicable. The appellant also failed to show financial hardship or produce supporting evidence for complete waiver.

Conclusion: The appellant was not entitled to unconditional waiver of pre-deposit. It was directed to deposit the entire duty demand of Rs. 45,00,000 within eight weeks, with waiver of the balance pre-deposit and stay of recovery only on such deposit.

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