2018 (4) TMI 1552 – CESTAT NEW DELHI – TMI – Valuation – inclusion of subsidy amounts in the value of the goods cleared by the appellants – Revenue was of the view that VAT liability discharged by the utilisation of the investment subsidy granted in Form 37B actually paid, for the purpose of Section 4 of the Central Excise Act – Held that:- Identical issue decided in the case of SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR [2018 (1) TMI 915 – CESTAT NEW DELHI], where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans – appeal allowed – decided in favor of appellant. – E/50001, 50041, 50152, 50153, 50158, 50159, 50185, 50186, 50188, 50189, 50193, 50225, 50226/2018-DB – Final Order No. 51427-51514/2018 – Dated:- 11-4-2018 – E/50001, 50041, 50152, 50153, 50158, 50159, 50185, 50186, 50188, 50189, 50193, 50225, 50226, 50235, 50257, 50260, 50263, 50269, 50270, 50271, 50294, 50295, 5029
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ecision India Pvt Ltd, Daido India Pvt Ltd, Rajasthan Flexible Packaging Ltd, Airtrax Polymers Pvt Ltd, Jaquar & Company Pvt Ltd, FCC Clutch India Pvt Ltd, Premier Bars Pvt Ltd, Jagdamba Tmt Mills Ltd, Shree Balaji Forgings Pvt Ltd, Shree Balaji Furnaces Pvt Ltd, Shera Energy Pvt Ltd, Crystal Polytech Pvt Ltd, Shiva Steelage Pvt Ltd, Budhia Steel, Pine Laminates Pvt Ltd, Sanwariya Furnaces Pvt Ltd, Shree Salasar Polyflex Pvt Ltd, Allied JB Friction Pvt Ltd, Aakriti Prime, Tokai Rubber Auto Parts Industries Pvt Ltd, Unik Dispoware Pvt Ltd, Takahata Precision India Pvt Ltd, Sanjo Forge India Pvt Ltd, Fine Products Pvt Ltd, TS Tech Sun Rajasthan Pvt Ltd, New Swan Enterprises (Unit IV), Inox Air Products Private Limited, Raghupati Casting P Ltd, Giri Raj Casting P Ltd, Galaxy Taps Private Limited Neemrana Steel Service Centre India, Trans Acnr Solutions P Ltd, Maruti Products Pvt Ltd, Sanjog Steels Pvt Ltd, BMI Industries, Fiem Industries Limited, Banglore Polycotters Pvt Ltd, Oji Jk P
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atish Chandra: 1. The present appeals have been filed against the above mentioned Order-in-Appeal. 2. The brief facts of the case are that the appellants have established their factories in the State of Rajasthan and were operating under Rajasthan Investment Promotion Scheme which was notified by the Government of Rajasthan with the objective of facilitating investment in the establishment of new enterprises under the various schemes of Rajasthan Government. The appellants (assessees) were eligible for subsidies as per the various schemes applicable to the assesses and they were required to deposit VAT/CST/SGST at the applicable rate with the Government and in terms of the scheme notified, will be entitled to disbursement of subsidy by the appropriated authorities. The subsidy concern is sanctioned and disbursed in Form 37B and as such challans in the form VAT 37B can be utilised for discharge of the VAT liability of the appellant for subsequent period. The Revenue was of the view that
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scharge their VAT liability by making payment of the same. Out of such VAT credited to the Government, a certain portion is disbursed back to them in the form of subsidies. Such disbursement happens in the form of VAT 37 B, challan which can be utilized in subsequent periods to discharge VAT liability. The crux of the dispute in the present case is whether such subsidy amounts are required to be included in the assessable value of the goods manufactured by the appellants, in terms of Section 4 of the Central Excise Act. As per the concept of transaction value outlined in Section 4, with effect from 01/07/2000, any sales tax/VAT actually paid can be deducted from the transaction value for payment of excise duty. Revenue has taken the view that payment of VAT using 37B Challans cannot be considered as actual payment of VAT. 8. Both sides have referred to the decision of the Apex Court in the case of Super Synotex India Ltd. In the above decision the Apex Court has categorically held that
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using such Challan are considered legal payments of tax. In view of the above, Revenue is not correct in taking the view that VAT liability discharged by utilizing such subsidy challans cannot be taken as VAT actually paid. 10. It is pertinent to reproduce the observations of the Tribunal in the Welspun Corporation Ltd. case 5.1 The Respondent company opted for Remission of Tax Scheme and was thus eligible for the Capital subsidy in the form of remission of Sales Tax subject to the conditions to be fulfilled…. The subsidy in the form of remission of sales tax was in fact a percentage of capital investment… Separate assessment orders were thus issued by the assessing officer of the sales tax department from time to time towards the incentive scheme amount. The Competent Authority was required to necessarily pass order for remission of such tax separately for each tax period. The remission of tax is thus directly related to capital investment in fixed asset. There was no op
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