2018 (8) TMI 1091 – CESTAT NEW DELHI – TMI – Valuation – includibility – investment subsidy against Entitlement Certificate sanctioned under the above policy – Held that:- The issue of liability of payment of excise duty on the subsidy amounts has been decided in favour of the appellant in the case of GREENLAM INDUSTRIES LTD [2018 (4) TMI 1552 – 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.
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There can be no liability for payment of excise duty on the VAT subsidy amount – penalty also set aside – appeal allowed – decided in favor of appellant. – Ex. Appeal No. 51465 of 2018 – A/52554/2018-EX[DB] – Dated:- 16-7-2018 – Mr. V. Padmanabhan, Member (Technical) And Ms. Rachna Gupta, Member (Judicial) Sh. G. G. Gupta, Advocate for the appellant Ms. Tamana Alam, AR for the Respondent ORDER Per: V. Padmanabhan: The present appeal is against the Order-in-Appeal No. 87/(A
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ellant in several decisions. He specifically brought to notice the decision of the Tribunal in Final Order No. 51427 – 51514/2018 dated 11.04.2018. He pointed out that out of the 88 appellants, in the case was disposed of by the Tribunal vide the above order, the appellant was one of the appellants therein for a different period. He submits that since the duty demand has been decided in favour of the appellant, there is no justification for imposition of penalty. 4. Revenue is represented by Ms. Tamana Alam, ld. AR. She reiterated the finding of the lower authority. 5. After hearing both sides and on perusal of record including the order of the Tribunal, we note that the issue of liability of payment of excise duty on the subsidy amounts has been decided in favour of the appellant vide the order cited by the appellant. The observation of the Tribunal are reproduced below for ready reference: 1. The brief facts of the case are that the appellants have established their factories in the
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ed to include such subsidy amounts in the value of the goods cleared by the appellants and demanded the difference of the duty. Being aggrieved, the appellants have filed the present appeals. 2. With this background we heard the Ld. Advocates for the appellant and Shri M.R. Sharma, Ld DR for the Revenue. 3. After hearing both sides and on perusal of record, it appears that the identical issue has come up before the Tribunal in the case of Shree Cements Ltd. V/s CCE, Alwar 2018-TIOL-748-CESTAT-DEL where it was observed that:- 7. We have heard both sides at length and perused the appeal record. As out lined above, the appellants are covered by the Investment Promotion Schemes of the Rajasthan Government. In terms of the various schemes of the Rajasthan Government, the appellants are required to discharge 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 hap
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of Welspun Corporation Ltd. (Supra) has distinguished the decision of the Apex Court in the light of Gujarat VAT Act, 2003. In the Welspun Corporation Ltd. case, the assesse had opted for remission of tax scheme under which a portion of the VAT paid was remitted back to the assessee. The Tribunal held that such subsidy amounts are not required to the included in the transaction value. 9. In the present case we know that for the initial period the assessees are required to remit the VAT recovered by them at the time of sale of the goods manufactured. A part of such VAT is given back to them in the form of subsidy in Challan 37 B. Such Challans are as good as cash but can be used only for payment of VAT in the subsequent period. In terms of the scheme of the Government of Rajasthan payment of VAT 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 b
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in in production, employment of certain percentage of persons in assessee unit, and numerous other conditions as brought out in Para 9 of the impugned Order-in-Appeal. 11. By following the decision of the Tribunal in the Welspun Corporation Ltd. case we conclude that there is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans. 12. In the result, the impugned orders are set aside and the appeals are allowed. 5. By following our earlier order (supra), we set aside the impugned orders and allow all the appeals with consequential relief, if any . 6. By following the above order, we come to the conclusion that there can be no liability for payment of excise duty on the VAT subsidy amount. Consequently, the liability for penalty also does not arise. 7. In the result, we set aside the impugned order and allow the appeal. (Dictated and pronounced in the open Court). – Case laws – Decisions – Judgements – Orders – Tax Management
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