By TIOL News Service

MUMBAI, JAN 18, 2015: DURING the period between May 1992 to September 1992, the appellant cleared 1785 no. of cars as "taxis" availing the benefit of Notification 162/86-CE dated 01.03.1986 which granted concessional rate of duty subject to following the conditions, which apparently the appellant complied with.

Subsequently, it was noted by the Revenue that out of 1785 no. of taxis, 75 vehicles were de-registered and converted into private vehicles.

Revenue sought to deny the benefit of the said notification in respect of these vehicles and accordingly issued a demand notice.

The CCE, Mumbai-II upheld the demand and, therefore, the appellant is before the CESTAT.

The appellant submitted that there is no dispute as to the fact that while clearing the vehicles from the factory, they produced the requisite certificate and were following the conditions laid down. Inasmuch as the entire issue has arisen due to the misuse of the benefit by the dealer and they cannot be held responsible for such misuse. It is also submitted that on identical issue and in respect of the very same Notification, the Coordinate bench of the Tribunal in the case of Maruti Udyog Ltd. - 2002-TIOL-78-CESTAT-DEL has held that assessee cannot be held responsible for the action taken by the dealers and that the Revenue appeal against this order was dismissed by the Apex Court.

The AR justified the CE duty demand.

The Bench extracted paragraphs 9.2 to 9.4 of the Tribunal decision cited in Maruti Udyog Ltd. (supra) which was upheld by the apex court and observed that in view of the judicial pronouncement, the order of the CCE, Mumbai-II is liable to be set aside.

Inasmuch as there was no liability on the appellants under the notification 162/86-CE to ensure continued use of the vehicles as taxis.

The appeal was allowed.

(See 2015-TIOL-138-CESTAT-MUM)