Ad valorem automobile cess must follow the excise valuation framework, not a restricted statutory definition of value.

For levy of automobile cess under the notification issued under the Industries (Development and Regulation) Act, the Court held that the special definition of "value" in Section 9(1) governed only the ceiling on levy and did not control actual computation. Because Rule 3 of the Automobile Cess Rules, 1984 applied the levy and collection provisions of the Central Excises and Salt Act, 1944 so far as may be, the ad valorem cess had to be calculated using the excise valuation framework. The assessee's valuation method was upheld and the Revenue's contrary construction failed.

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Issues: Whether, for levy and collection of automobile cess under the notification issued under Section 9 of the Industries (Development and Regulation) Act, 1951, the value of the motor vehicles had to be determined by the Explanation to Section 9(1) or by the valuation method applicable under the Central Excises and Salt Act, 1944 through Rule 3 of the Automobile Cess Rules, 1984.

Analysis: Section 9(1) empowered levy of cess at a notified rate and the Explanation defined "value" only for the purpose of the ceiling in Section 9(1). That definition did not control the actual computation of cess under the notification. Rule 3 of the Automobile Cess Rules, 1984 made the provisions relating to levy and collection under the Central Excises and Salt Act, 1944 applicable so far as may be to the cess. The proper basis for calculating the ad valorem cess was therefore the excise valuation method and not the special definition in the Explanation to Section 9(1).

Conclusion: The valuation method urged by the assessee was correct and the Revenue's contention failed.

Final Conclusion: The cess on automobiles was to be computed by applying the excise valuation framework under the Automobile Cess Rules, 1984, and not by using the restricted definition of "value" in Section 9(1) of the Industries (Development and Regulation) Act, 1951.

Ratio Decidendi: Where a cess rule incorporates the excise valuation regime for levy and collection, the computation of an ad valorem cess must follow that incorporated valuation method and not a separate statutory definition confined to the enabling section.

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