2023 (6) TMI 409 - AT - Central Excise

Inclusion of Subsidy in Assessable Value Denied by Tribunal

The Tribunal concluded that the subsidy received under the Rajasthan Investment Promotion Scheme, 2010 should not be included in the assessable value of ... Valuation - amount of subsidy received by the appellant from the State Government under the Rajasthan Investment Promotion Scheme, 2010 is includible in the assessable value of the goods or not - section 4(3)(d) of the Central Excise Act, 1944 - HELD THAT:- The issue, stands settled by an order dated 21.03.2023 of the Tribunal while answering on the reference that had been made on account of difference of opinion between the two Members constituting the Division Bench in M/S HARIT POLYTECH PVT. LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & CGST- JAIPUR I, GANPATI PLASTFAB LTD., M/S APEX ALUMINIUM EXTRUSION PVT. LTD., M/S MAHA MAYAY STEELS, M/S. TIRUPATI BALAJI FURNACES PVT. LTD., M/S. TRANS ACNR SOLUTIONS PVT. LTD., M/S. FRYSTAL PET PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & CGST- ALWAR [2023 (3) TMI 1120 - CESTAT NEW DELHI]. The order of the Commissioner (Appeals) does not suffer from any illegality so as to call for interference - Appeal allowed. Issues:The issue involved is whether the subsidy received by the appellant from the State Government under the Rajasthan Investment Promotion Scheme, 2010 should be included in the assessable value of goods cleared during a specific period under the Central Excise Act, 1944.Observations by Commissioner (Appeals):The Commissioner (Appeals) allowed the appeal by noting that the appellant had not actually paid the tax collected from customers to the extent of the amount adjusted towards subsequent tax liability through 37B challans.Settled Issue:The issue was settled by a Tribunal order, referencing a previous case, M/s Harit Polytech Pvt. Ltd. Vs. Commissioner, Central Excise, CGST, Jaipur-I, to resolve a difference of opinion between the Members of the Division Bench.Arguments by Department:The Department's representative cited a Supreme Court decision to support the appeal's allowance, emphasizing the relevance of the decision in the current case.Reference by Division Bench:The Division Bench raised multiple questions regarding the subsidy in question, its impact on selling price, and its treatment as additional consideration, leading to a detailed analysis and comparison of different viewpoints.Answer to Reference:The Tribunal answered the reference by concluding that the subsidy under the promotion policy does not reduce the selling price, is not additional consideration, and is not affected by the Supreme Court decision cited. The subsidy amount was deemed not to affect the selling price of goods, and the provisions of the Rajasthan VAT Act were found inapplicable to the case.Conclusion:Based on the Tribunal's resolution of the reference and the inapplicability of the Supreme Court decision, the Commissioner (Appeals) order was upheld, and the appeal was allowed.