Remitted sales tax under a capital incentive scheme stayed excluded from excise assessable value under valuation rules.

Sales tax remitted under the Gujarat incentive scheme was held outside the assessable value for central excise because the levy was legally payable and then waived as a capital incentive linked to fixed investment. The transaction value under section 4 of the Central Excise Act, 1944 excludes sales tax actually paid or actually payable, and the remitted amount did not become additional consideration from the buyer. The facts were distinguished from an exemption-based incentive, so the ratio of Super Synotex did not apply. The impugned orders were upheld and the Revenue's appeals failed.

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Issues: Whether sales tax or VAT retained under the Gujarat incentive scheme as remission and capital subsidy was includible in the assessable value for central excise duty.

Analysis: The scheme operated as remission of tax linked to fixed capital investment and not as a blanket exemption from levy or payment of sales tax. The sales tax authorities assessed the tax as payable and then remitted it under the scheme, and the statute treated such remitted tax as deemed paid. Under section 4 of the Central Excise Act, 1944, the transaction value excludes sales tax actually paid or actually payable. The facts were therefore distinguishable from an exemption-based incentive, and the ratio of Super Synotex did not apply. The remission represented a capital incentive and not an additional consideration flowing from the buyer.

Conclusion: The remitted sales tax was not includible in the assessable value and the Revenue's challenge failed.

Final Conclusion: The impugned orders were upheld and the Revenue's appeals were dismissed because the tax remission under the scheme did not alter the exclusion available for sales tax actually payable under the excise valuation provisions.

Ratio Decidendi: Where sales tax is legally payable and is later remitted under a capital incentive scheme, the remitted amount remains outside the assessable value under section 4 of the Central Excise Act, 1944 and does not become an additional consideration.

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