Automobile cess on body builders: existing circular protected the assessee at the stay stage, with recovery stayed.

An independent body builder using chassis on which automobile cess had already been paid was treated, at the prima facie stage, as not liable to pay the cess again. The order applied a Board circular stating that automobile cess was intended for vehicle manufacturers and not for independent body builders where cess had already been paid on the chassis; it also noted that the circular remained in force and had been issued in consultation with the Administrative Ministry. Chapter Note 5 of Chapter 87 was not taken to displace that clarification at the stay stage, and a strong prima facie case was found. Pre-deposit was waived and recovery of cess, demand, interest and penalty was stayed.

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Issues: Whether the appellant, acting as an independent body builder on chassis supplied by the chassis manufacturers who had already paid automobile cess, was required to pay automobile cess again, and whether the circumstances justified waiver of pre-deposit and stay of recovery.

Analysis: The order relied on the Board circular clarifying that automobile cess was intended to be levied on vehicle manufacturers and not again on independent body builders when cess had already been paid on the chassis. The circular was treated as still in force and as having been issued after consultation with the Administrative Ministry. On that basis, the introduction of Chapter Note 5 of Chapter 87 was held not to displace the earlier clarification at the prima facie stage, and the appellant was found to have a strong prima facie case.

Conclusion: The appellant was not required to make pre-deposit at the stay stage, and recovery of cess, demand, interest and penalty was stayed.

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