M/s T.S. Tech Sun Rajasthan Pvt. Ltd. Versus CCE &CGST, Alwar
Central Excise
2018 (8) TMI 1091 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 16-7-2018
Ex. Appeal No. 51465 of 2018 – A/52554/2018-EX[DB]
Central Excise
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/(AK)CE/JPR/2017 dated 14.03.2017 passed by Commissioner (Appeals), Central Excise & CGST, Jaipur.
2. Brief facts of the case are that the appellant is a manufacturer of automobile components and is situated in Neemrana where they are entitled to VAT subsidy under Rajasthan Investment Promotion Policy-2003. The Department noticed that they have not paid duty on value including the investment subsidy against Entitlement Certificate sanctioned under the above policy. Accordingly, duty demands wer
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s. 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 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
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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 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 transac
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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 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 th
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