Supreme Court lifts ban on diesel vehicles of 2000cc & above, imposes green cess

The apex court said that the one per cent amount, charged as environment protection charge, shall be paid with Central Pollution Control Board (CPCB) which will open a separate account with a scheduled public sector bank.

The direction modifying its December 16, 2015 order came on a plea of automobile giants.

The apex court said that the registration of the vehicle would be done by the Regional Transport Officer on the satisfaction that one per cent of the cost of the vehicle has been deposited with the CPCB by the vehicle manufacturers/dealer/sub-dealer.

However, a bench headed by Chief Justice T S Thakur left open for adjudication Centre's opposition that such charge cannot be levied by the court.

The bench also comprising justices A K Sikri and R Banumathi said it will decide later whether green cess can be levied on diesel vehicles of below 2000cc engine capacity.

The bench passed the direction after modifying its December 16, 2015 order which was extended on March 31, 2016.

The apex court had earlier agreed to hear the plea of luxury car maker Mercedes-Benz offering to pay one per cent environment cess in a bid to overcome the ban on registration of vehicles with engine capacity of 2000 cc or more in Delhi and NCR.

Senior advocate and former solicitor general Mohan Parasaran, who had appeared for Mercedes, had said the company has offered to pay 1 per cent of the ex-showroom price of these cars as green cess on being permitted to resume sales in Delhi and NCR.

On July 4, the court had reserved its verdict on pleas seeking modification of its order banning registration of diesel-run SUVs and high-end cars with engine capacity of 2000 cc and above in Delhi and NCR, indicating that such vehicles may be allowed to be registered again on payment of one per cent of ex-showroom price as green cess.

The Ministry of Heavy Industry and Public Enterprises, which supported the automobile giants' bid for modification of the order, had, however, opposed the court mandated imposition of green cess on buyers of big diesel cars and SUVs.

Earlier, on June 29, the court had said it was open to lifting the ban on registration of heavy diesel vehicles in Delhi and NCR subject to a levy of one-time environment compensation cess.