Industrial subsidy excluded from excise assessable value where it was not linked to sale price reduction or additional consideration.

Subsidy received under the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2004 was not includible in assessable value under section 4(3)(d) of the Central Excise Act, 1944. The reasoning was that the assessee had collected full sales tax from customers and later received the State subsidy under the promotion policy, so the subsidy did not reduce the selling price or operate as additional consideration for the sale. The decision distinguished Super Synotex India on the ground that, there, only part of the collected tax was remitted to the State and the balance was retained by the assessee.

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Issues: Whether the subsidy received under the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2004 was includible in the assessable value of the goods cleared during the relevant period under section 4(3)(d) of the Central Excise Act, 1944.

Analysis: The reference decided in the connected matter had already concluded that where the assessee collected the full sales tax from customers and thereafter received subsidy from the State Government under the promotion policy, the subsidy did not reduce the selling price of the goods and was not an additional consideration for the sale. The earlier decision in Super Synotex India was held inapplicable on the facts because, in that case, only part of the collected tax was paid to the State and the balance was retained by the assessee. On the facts here, the subsidy was not linked to any reduction in the tax actually payable by the assessee and therefore could not be added to transaction value.

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

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