Subsidy and excise valuation: sales tax-paid subsidy not treated as additional consideration for goods clearance.

A subsidy received under the Rajasthan Investment Promotion Scheme, 2010 was not includible in assessable value under section 4(3)(d) of the Central Excise Act, 1944 because the full sales tax collected from customers was paid through the prescribed mechanism and the subsidy did not operate as any amount retained from that collection. It was therefore not additional consideration for the sale of goods and did not reduce the selling price or transaction value. The ruling in Super Synotex India was held inapplicable on these facts, and the subsidy was excluded from central excise valuation.

---

---

Issues: Whether the subsidy received under the Rajasthan Investment Promotion Scheme, 2010 was includible in the assessable value of goods cleared during the relevant period under section 4(3)(d) of the Central Excise Act, 1944.

Analysis: The subsidy was examined in the context of the State promotion policy and the manner in which sales tax liability was discharged through the prescribed challan mechanism. It was held that the entire amount of sales tax collected from customers was paid, and the subsidy did not operate as an amount retained out of the sales tax collection so as to reduce the selling price. On that basis, the amount could not be treated as an additional consideration for the sale of goods. The decision in Super Synotex India was held to be inapplicable on the facts, and the earlier reference answered that the subsidy did not affect the selling price or the transaction value for central excise purposes.

Conclusion: The subsidy was not includible in the assessable value under section 4(3)(d) of the Central Excise Act, 1944, and the appeal succeeded.

---