2025 (5) TMI 552

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....on challenges Order-in-Original dated 21st January, 2025 along with Rectification Order dated 13th March, 2025. Petitioner No. 1 is, inter alia, engaged in the manufacture and trading of passenger cars of various models and variants of the Mercedes-Benz brand falling under Chapter Heading 8703 of the Customs Tariff Act, 1975, as made applicable to assessment under relevant legislative provisions under the Central Goods and Service Tax Act, 2017 ("CGST Act"). Petitioner No. 2 is an employee of Petitioner No. 1. 4. The Petitioners were issued Show Cause Notice dated 9th December, 2022 by which it was alleged that Petitioner No. 1 has short-paid Compensation Cess leviable under the Goods and Services (Compensation to States), Act, 2017 read....

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....ember, 2019 held that the ground clearance be computed in a laden condition of the vehicle. Since, the impugned motor vehicles bore ground clearance of less than 170mm in laden condition, they were correctly paying Compensation Cess at 20% under Sr. No. 52A of the Cess Notification. 8. It is the Respondents' case that in the absence of a specific mandate of law, the ground clearance should be measured in an un-laden condition and since in the Petitioners' case the impugned vehicles, in an un-laden state, bore ground clearance of 170 mm or above, they would attract Compensation Cess at 22% under Sr No. 52B of the Cess Notification. 9. At this stage, the learned Counsel for the Petitioners drew our attention to the Minutes of the 50....

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....titioner submitted that in view of the above, the Explanation inserted with effect from 26th July, 2023 will apply only to supplies made on or after 26th July, 2023. He submitted that the Petitioner has been paying Compensation Cess at 22% for the vehicles with ground clearance of 170mm or above in an un-laden state and supplied on or after 26th July, 2023. 13. On the other hand, the learned Counsel for the Respondents submitted that Respondent No. 3 did not have the advantage of the Circular dated 14th February, 2025 as the Impugned Order was passed and issued prior to the said date. Hence, Respondent No. 3 has righty denied the benefit of lower Compensation Cess to the Petitioners. 14. Having heard the learned Counsel for the partie....