Per Shri P.C. Jain:

Question involved in this appeal of the Revenue is whether for the purpose of charging Cess under the Paper and Paper Board Cess Rules, 1981, the Central Excise Duty will have to be included in the value of the paper and paper-board. The said Rules were issued in exercise of the powers conferred by Section 30 of the Industries (Development & Regulations) Act, 1951. Rule 3 of the said Cess Rules as quoted in 1988 (29) ELT-242 (Tribunal), reads as follows:-

"Save as otherwise provided in these rules, the provisions of the Central Excises and Salt Act, 1944 (1 of 1944), and the Rules made thereunder including those relating to refund of duty, shall, so far as may be, apply in relation to the levy and collection of the cess as they apply in relation to the levy and collection of the duty of excise on paper and paper board under that Act and the Rules made thereunder."

2. The original authority charged Cess under the aforesaid Rules after including the element of Central Excise duty and Sales Tax payable on the paper and paper board manufactured by the respondents herein.

3. On appeal, the respondents herein succeeded.

4. Lower appellate authority accepted the appeal of the respondents relying on the Tribunal's Judgement in the case of Tata Engineering and Locomotive Co. Vs. Collector of Central Excise, Patna reported in 1988 (35) ELT-410.

5. The Commissioner of Central Excise, Bhubaneswar has directed the Assistant Commissioner to file an application under Section 35E observing in his Order No. 17/82 dated 16.4.92 passed under Section 35E (2) that the Automobile Cess Rules, 1984 which were under the consideration of the Tribunal in the case of T.E.L.C.O. are in terms different from Paper and Paper Board Cess Rules, 1981.

6. It has been pointed out by the Commissioner in his Order dated 16.4.92 that the expression, "amount of duty then payable" in Explanation to Sub-Section 9 (1) of I.D.R.A., 1951, will alone be deductible and not other taxes i.e. Central Excise Duty and Sales Tax.

7. We observe that the issue raised by the Revenue in the present appeal is no longer res integra in view of the Apex Court Judgement on Revenue's appeal against the aforesaid Judgement of the Tribunal, which is now reported in 1997 (20) RLT 367 (S.C.) = 1997 (92) ELT-303 (SC). It has been ruled by the Apex Court that under the Automobile Cess Rules, what is relevant is Rule 3 thereof, which states that the provisions of Central Excises and Salt Act, 1944 shall, so far as may be, apply in relation to the levy and collection of the cess. The calculation of 1/8 per cent ad valorem of the motor vehicle for the purposes of the levy and collection of the cess must, therefore, be made as if it was excise duty that was being calculated and applying the provisions of the Central Excises and Salt Act for the purpose. It is not the explanation of Sub-Section 9 (1) of I.D.R.A., 1951 that would be applicable for the controversy in hand. We, further, observe that Rule 3 of the Paper and Paper Board Cess Rules as quoted above is identical to Rule 3 of the Automobile Cess Rules, 1984 as reported in 1997 (92) ELT-303 (SC) supra. The ratio of the Apex Court Judgement in the case of T.E.L.C.O. supra would, therefore, squarely apply to the facts and circumstances of the instant case. Following respectfully the said Ruling of the Apex Court, we dismiss the appeal of the Revenue Co. disposed of.