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of <h1>Exclusion of Rajasthan subsidy from Central Excise Duty value calculation</h1> <h3>M/s H-One India Private Limited, M/s Yukata Autoparts India Pvt. Ltd., M/s Maruti Products Pvt. Ltd., M/s Mittal Forgings & Components Pvt. Ltd., M/s Badve Engineering Ltd., M/s Seva Steel (P) Ltd. Versus Commissioner of Central Excise</h3> M/s H-One India Private Limited, M/s Yukata Autoparts India Pvt. Ltd., M/s Maruti Products Pvt. Ltd., M/s Mittal Forgings & Components Pvt. Ltd., M/s ... Issues Involved:1. Inclusion of subsidy in the 'Transaction Value' for Central Excise Duty.2. Applicability of the Supreme Court decision in Commissioner of Central Excise vs Super Synotex (India) Limited.3. Interpretation of the Rajasthan Investment Promotion Scheme – 2010.4. Distinction between 'Subsidy' and 'Remission' under various schemes.Issue-Wise Detailed Analysis:1. Inclusion of Subsidy in the 'Transaction Value' for Central Excise Duty:The primary issue in these appeals was whether the subsidy received under the Rajasthan Investment Promotion Scheme – 2010 should be included in the 'Transaction Value' for the purpose of calculating Central Excise Duty. The Appellants had received subsidies that were adjusted towards payment of VAT and CST but did not pay Central Excise Duty on the amount retained. The Adjudicating Authorities confirmed the demand for Central Excise Duty, along with interest and penalties, which was upheld by the Commissioner (Appeals).2. Applicability of the Supreme Court Decision in Commissioner of Central Excise vs Super Synotex (India) Limited:The Appellants contended that the Scheme under consideration was different from the one in Super Synotex (India) Limited, where the Supreme Court had ruled that only the sales tax actually paid could be deducted from the transaction value. The Commissioner (Appeals) rejected this contention, stating that the Appellants had collected the full amount of sales tax from buyers but retained a portion of it, which should be included in the transaction value.3. Interpretation of the Rajasthan Investment Promotion Scheme – 2010:The Scheme aimed to promote investment and employment in Rajasthan, offering subsidies as financial assistance. The Appellants argued that the subsidy should not be included in the transaction value since it was a financial assistance provided after the entire VAT amount was deposited. The Tribunal examined the provisions of the Scheme, including the procedure for disbursement of subsidy, and found that the subsidy was a financial assistance rather than a remission of tax.4. Distinction Between 'Subsidy' and 'Remission' Under Various Schemes:The Tribunal distinguished the present Scheme from the one considered in Super Synotex (India) Limited and other cases involving remission schemes. It noted that in the present case, the entire VAT amount was deposited, and the subsidy was provided as financial assistance, unlike remission schemes where a portion of the tax was retained by the assessee. The Tribunal referred to its earlier decisions in Shree Cement Ltd. and Maihar Cement, which had similar schemes and concluded that the subsidy should not be included in the transaction value.Conclusion:The Tribunal set aside the impugned order, ruling that the financial assistance granted under the Rajasthan Investment Promotion Scheme – 2010 could not be included in the transaction value for the purpose of calculating Central Excise Duty. The Appeals were allowed, and the Tribunal emphasized that the nature of the Scheme, which provided subsidy and not remission, was crucial in distinguishing it from other cases.
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