Relief to Hero Cycle: CESTAT rules No Automobile Cess to be Paid on E-Bike when already paid at Time of Import [Read Order]

In a major relief to M/s Hero Cycle Ltd, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that no automobile cess to be paid on e-bike when already paid at time of import.

The present appeal is directed against the impugned order passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) confirmed the demand of Automobile Cess on the ground of value addition but further held that there is a need to work out the Automobile Cess on the value addition and accordingly the matter will require fresh computation to re-look but did not impose any penalty and demand interest on the appellant.

The allegation against the appellant is that they did not file any mandatory return in the format prescribed under the Automobile Cess Rules, 1984 and suppressed the production, clearance and value of E-Bikes from the department with intent to evade payment of automobile cess.

The E-Bikes were chargeable to duty as per section 4 of Central Excise Act and E-Bike parts on MRP basis as per section 4A of Central Excise Act. A show cause notice dated 19.11.2010 was issued to the appellant alleging that appellant imported E-Bike parts and E-Bikes in CKD condition. The E-Bike were granted full exemption from payment of duty vide notification 25/2008-CE dt. 29.04.2008 and that appellant were required to show production and clearance of E-Bikes in the relevant columns of ER-1’s.

The counsel for the appellant submitted that the appellant at the time of import of E-bike in CKD condition paid the automobile cess and there is no need to pay the automobile cess again because E-bike imported in CKD condition after assembling cleared without payment of Central Excise duty as goods imported and cleared from the factory premises falling under same sub-heading and the processes undertaken does not amount to manufacture as per Section 2(f) of Central Excise Act being no new/distinct product came into existence.

A Single Member Bench of the Tribunal comprising SS Garg, Judicial Member observed that “I find that the appellant has paid the automobile cess at the time of custom clearance which is reflected in the Bill of entry 531 dated 11.07.2008 produced at page 33 of the appeal paper book showing payment of automobile cess on E-Bike in CKD condition. Therefore, I hold that the appellant is not required to pay automobile cess because he has already paid the same at the time ofimport which has been shown in the Bill of entry 531 dated 11.07.2008.”

To Read the full text of the Order CLICK HERE

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